Overview of Automated Teller Machines (ATM)

• Customer Using ATM
  
  Automated Teller Machines (ATM) are computerized machines that allow customers to conduct basic banking transactions without an attendant or bank teller. ATMs are generally located in public places, such as shopping malls, airports, restaurants and gas stations. They provide a convenient way for people to deposit money, withdraw money or check account balances without going to an actual bank. In order to use an ATM, a customer must insert a plastic card with account information encoded on a magnetic strip and enter a personal identification number. These procedures prevent unauthorized users from conducting transactions and ensure that customer account information is kept private.
  
  

How ATMs Work

• ATM machines are connected to interbank networks, which are computer networks connecting different banks around the world. The interbank networks allow banks to electronically share account information about customers. This enables customers to use ATMs from different banks to access funds in their accounts. The two largest interbank networks are PLUS and Cirrus, although several smaller networks operate as well. Before a transaction can be processed, the ATM machines must receive authorization from the customer's native bank, such as confirmation that the customer has sufficient funds in his account to permit cash withdrawal. Interbank networks allow this authorization process to take place in seconds. Banks charge non-native ATM users a fee to defray the cost of these transactions.
  
  

Components of an ATM

• Diagram of an ATM Machine
  
  ATMs are advanced computer systems that contain sophisticated hardware and software. All ATMs include a central computer that processes transaction information, a magnetic reader to identify customers, a numerical keypad that allows customers to enter personal identification numbers, an electronic display and a functional keypad or touch screen. ATMs also include a standard software operating system, such as RMX, OS/2 or Microsoft Windows. The software system controls the AMT's interaction with the interbank networks and allows the central computer to process financial transactions. Finally, ATMs contain a series of cash cartridges (which can be removed and re-filled) and a vault, which dispenses cash and accepts deposited cash and checks. Vaults are maintained and monitored by bank personnel to ensure that deposited funds are credited to customer accounts. It is usually not possible to deposit funds in a non-native ATM.