Blog  /  Working ATM: The Anatomy and How to Operate One

Working ATM: The Anatomy and How to Operate One

Have you ever thought about what's behind the working mechanism of an ATM? How does it operate? Or perhaps you want to know the design elements of this cash dispensing machine? What's inside the working ATM, a circuit board?

If you want to answer all the above questions, you're in the right place.

In this article, we'll dive deeper into a more detailed description of the ATM, the types available, how it works, and more.

You'll also find out the difference between an ATM card and a debit card.

If you're ready, let's begin!

 

What is an Automated Teller Machine?

 

Male inserting card into ATM

Male inserting card into ATM

 

An automated teller machine is an electronic device that helps customers perform simple transactions without using tellers or contacting bank representatives. And you can access cash at most ATMs—as long as you have a debit or credit card. 

So, you can use the ATM to carry out fast self-service transactions like bill payments, deposits, transfers between accounts, and cash withdrawals. 

Interestingly, you may be charged for your cash withdrawals by the ATM operator or the bank. But you can avoid the fees by strictly using your bank-operated ATM. 

 

What are the Design Elements of the ATM?

 

Switch block design for ATM

Switch block design for ATM

Source: ReseachGate ℅ Edna Barros

 

Most ATMs have different designs, but they have the following features in common: 

I/O board: this helps regulate the processor communication via a phone line or the internet. 

LCD (Display screen): This part guides you with instructions on operating the machine.

Mainboard: this is a vital part of the machine that manages the ATM processing. And it accommodates the machine's memory and CPU. Plus, it offers a connection to the other parts of the device.

Keypad: it gives you access to input information—based on your transaction. For instance, you may provide information like the amount of transaction, PIN (personal identification number), and the type of transaction you plan to execute. 

Card Reader: This input device targets the magnetic stripe or EMV chip on your card. And it helps you read your account details.

The EMV is a global standard for chip-based card transactions. And it stands for Europay, MasterCard, Visa. Also, the EMV helps you to form a unique code for each transaction. 

Printer: with this, you'll get a receipt for every transaction. And the ticket usually has information on your account balance, type of transaction, and amount. 

Power supply: this element helps connect the other parts of the machine to external power. 

Cassette: it's responsible for holding the cash from the machine. 

Speaker: this output device gives audio feedback when pressing a key on the machine.

Cash dispenser: this part is responsible for distributing cash via a slot in the machine. And it connects to the machine's safe at the bottom.

 

Types of ATM Machines

 

In the market, we have various types of ATMs. And they include the following:

  • Brown Label ATM
  • Cash Dispenser
  • Pink Label
  • Mobile ATM
  • Orange Label
  • Offsite ATM
  • Green Label
  • Onsite ATM
  • Yellow Label
  • White Label ATM

But for the sake of this article, we'll talk about the major types of ATMs available:

Leased-Line ATM

 

Switch block design for ATM

Leased LIne ATM network

Source: Wikimedia Commons

 

These are ATMs that have a direct link to the host processor. And it does this via a dedicated four-wire point-to-point telephone line. You'll often find this type of machine in places that have high-traffic transactions. But the operating cost is high.

 

Dial-Up ATM

 

Dial-Up ATM

Dial-Up ATM

Source: Wikimedia Commons

 

The dial-up ATM uses a modem and toll-free number to connect to the host processor via a regular phone. Alternatively, this machine can connect to the host processor by using an internet service provider with a local access number (dialed with a modem). 

This machine is ideal for retail merchant locations because the cost factor outweighs the thru-put. Also, the cost of the dial-up machine is cheaper than the leased-line machine.

 

How the Automated teller Machine Works

 

The first step to initiating a transaction on an ATM is by placing your card in the machine's card reader. When you do that, the mainboard will ask for your pin. And you'll see that on the display screen.

Once you type your pin with the ATM's keypad, the mainboard will use the display to request the type of transaction you want. Once that happens, the mainboard will swing into action by forwarding your details (type of transaction, PIN, and EMV transaction code) to the processor. And the mainboard achieves this via the modem and I/O board. Afterward, the processor takes this information and directs the transaction to a network that connects with your card. 

That said, if you want to know the networks associated with your card, check the print behind it. Also, it's vital to note that each card must have two networks according to Federal regulation.

And it's because it gives the ATM options. If the transaction doesn't process on one network, it can use the second network. So, for you to have an approved transaction, the ATM network has to forward the information to your bank.

Hence, the result (denial or approval) goes back to the ATM via the automated teller machine network and processor. Also, if you do other transactions, the machine will process them in the same way. Further, the device will process your command if you select a withdrawal. And if the machine approves the request, your account will get a debit for the amount requested.

 

Cash Dispensing

 

ATM cash dispensing 

ATM cash dispensing 

 

The machine will send the transaction back to the ATM via the network and processors. Consequently, the mainboard will begin cash dispensing. At this point, the cash will move to the cassette. 

That said, the dispenser is a sensitive part of the ATM that ensures that one bill dispenses at a time. So, the dispenser can determine if the bill has the right thickness and size. Also, if an account has issues like it's worn or stuck together, the money will move to the reject bin.

When this happens, the machine will select another bill to dispense—until it reaches the ideal amount for the transaction. Also, when the statements allocate, the device will print a receipt for your marketing.

 

Difference between the ATM Card and Debit Card

 

It's normal to confuse the ATM and debit cards. After all, they both have similar functions and use.

The primary function of an ATM card is to help you get cash from your account. And you can use this card by inserting it into a machine. Then, put in your PIN, and your money will reduce in real-time from your account.

 

Man inserting using an ATM card

Man inserting using an ATM card

 

And this happens because the card links to your bank account. But, it's impossible to use your ATM card for other purposes asides from withdrawal. Also, it means that you can't gain any overdraft facility on the card.

On the other hand, the debit card allows you to perform different functions like clearing utility bills, withdrawing cash, shopping offline, etc. 

 

Senior woman making payments online with debit card

Senior woman making payments online with debit card

 

Plus, the card makes transactions convenient and fast

 

How to Operate the ATM Machine

 

You can operate the ATM in the following steps:

  1. Get to an ATM center and put your ATM card (the part with a gold chip should face up) into the machine.
  2. Pick your preferred language on the machine's screen.
  3. Choose the transaction you want, like deposit, money transfer, etc.
  4. Select your account type (current or savings).
  5. Put in your four-digit PIN and specify the amount you want to withdraw.
  6. Get your money from the cassette and your generated receipt.
  7. End your transaction. Or press "continue" to perform another transaction.

 

Rounding Up

 

A working ATM is crucial in today's digital world, and it saves us the stress of creating unnecessary long queues in the bank. That said, there are different types of ATMs available, and you need an ATM, credit, or debit card to harness the full function of the machine.

Have you thought about building your ATM? Or do you need help with making one? Feel free to reach us.