How Does ATM Work

A lot of people don’t know that ATM stands for ‘automated teller machine’ and not ‘any time money’. Even the most sophisticated of ATMs need to be maintained and serviced regularly, so one can’t make use of them ‘any time’ literally. The functionality of an ATM, like that of a computer, can be divided into 3 broad stages as follows:

The input stage is responsible for soliciting the debit card / credit card from the user into a designated slot. An electric coil fitted inside the card reading system reads the magnetic strip on the card in order to identify the card itself. The user enters the PIN (personal identification number) associated with the card in question. This combination of card and PIN uniquely authorizes the user to carry out transactions using that card.

The processing stage is responsible for making sure that the card entered is actually valid in the banking system and that the PIN entered is correct. In case it is not, a message is displayed accordingly and suitable action is taken in case of too many wrong attempts. In case the PIN entered is indeed correct, a list of transactions allowed is displayed, out of which the user has to make one choice at a time. Depending on the choice made, it carries out the transaction accordingly.

The output stage is concerned with displaying necessary information on the screen and also issuing currency notes. There is a cash dispensing system inside the ATM which first counts the notes to be dispensed as per the user’s entered amount, using a photocell. Using a combination of various rollers, it makes sure that no two notes that are stuck together get dispensed accidentally. Rubber suction pads hold onto each such note in the pipeline one at a time (using suction) and place them one by one into the output tray in order for the user to collect the money.