How ATM works

The acronym "ATM" stands for Automated Teller machine. 

An ATM machine consists of an output and input system.

The input system are usually made  of touch screen, keypad, finger print sensor and card reader while the output is the cash dispender.

Whenever we  want to widthdraw some cash from an automated teller machine, we have to insert our debit/credit card "which has an IC embedded into it" into the machine and then enter a four digit  PIN(personal identification number) issued to you by the bank via the keypad. After the PIN is verified the Machine displays a window on it LCD (liquid crystal display) which gives you an action such  as withdraw cash, balance check and transfer.

When you select withdraw cash and enter the amount you want to withdraw using the keypad, if you have the amount of  money in your bank account, the ATM dispenses cash with a receipt, if you requested for it. Briefly, an ATM is an embedded system (computer) with a mechanical dispenser for cash which is connected to an ATM transaction processor via the Internet or phone Line.

The ATM transaction processor is able to connect to ATM networks, that's why you can withdraw money from any ATM machine in any environment.

 

Basic parts of an ATM machine.

1. Mainboard.

The main board consists of processors, memory, electronic components and circuits.

It's responsible for the operation of the machine. It accepts input data from the input devices like the key pad, LCD touchscreen or the fingerprint sensor and convert it into signals which is then processed by the onboard processor and then decides the output based on logic, inputs from users and how the processor is coded.

In other words, every parts of the ATM machine is  connected to the main board.

2. Card Reader.

This part reads account information that is stored on an EMV chip or magnetic strip. Most card readers and cards today are EMV-enabled. The EMV acronym stands for  Europay, MasterCard, Visa. It is the global standard for chip-based debit and credit card transactions. The EMV chip creates a unique transaction code for that particular transaction.  

3. Display screen (LCD).

This is one of the output system of the ATM. It diplays information to the users such as commands prompts like (withdraw cash, balance inquiry, recharge etc.).

It also provides instructions on how the use the ATM.

4. Keypad.

It is an input system of the ATM which allows used to input information regarding transactions like inputing ATM PIN, widthdraw amount etc. 

5. Cassette.

It's a frame that holds cash. It acts as a storage medium to store the ATM cash for withdrawal.

6. Cash dispenser.

This is the part that moves the cash from the cassette to the cash tray. 

7. Printer.

This part prints the receipt for the customer when requested.

8. Power Supply.

This part problem provides the required amount of current/voltage the ATM needs to operate.

It consists of a regulator and converter circuits for regulating voltage to what the ATM can work on.

9. I/O Board.

This part controls the communication with the processor through the internet or phone line. 

10. Modem. 

This part executes the communication to the internet.

How the ATM processes transactions.

The ATM begin it operation when you insert your card into the ATM card reader. After inserting your card, the mainboard will request that you enter your pin using the display. After you enter your pin using the keypad, the mainboard requests the type of transaction to occur using the display. After the PIN and transaction is entered, the mainboard sends the unique EMV transaction code, PIN, and transaction to the processor through the I/O board and modem. 

The processor uses this information to route the transaction to an ATM network that is associated with the card. The networks associated with the card are usually printed on the back of the card. By Federal regulation, each card is required to have two networks so that if the transaction cannot be processed with one ATM network it can be processed with the other network. The ATM network then sends this information to the card issuer (i.e. your bank) to determine whether the transaction is approved. This approval or denial is sent back to the ATM through the ATM network and ATM processor. Each further transaction is processed in the same manner. When a withdrawal is selected the transaction is processed and, if approved, your bank debits your account for the amount. This transaction is sent back through the ATM networks and processor to the ATM. 

The mainboard then initiates the dispensing of the cash. The cash dispenser removes the bills from the cassette one by one. The dispenser is an ultra-sensitive piece of equipment that determines if each bill is of the right size and thickness to ensure that only one bill is dispensed at a time. If a bill is determined not to be correct; which can be caused by numerous factors including: being stuck together, torn, or worn, it is sent to the reject bin. If a bill is sent to the reject bin, another bill is selected to be dispensed until the right number of bills has been dispensed for the transaction.  After the bills have been dispensed, a receipt is printed for the transaction.