An Automatic Teller Machine (ATM) performs simple banking functions such as deposits, withdrawal, cash dispensing, and transfers between accounts.
An ATM is a terminal connected via telephone or dedicated telecommunication lines to larger computer systems that identify the user’s account on the basis of data stored in a magnetic strip on the back of a plastic ATM card commonly known as the credit card. The user operates the systems using an exclusive Personal Identification Number (PIN), assigned to him or her.
An ATM includes four main computer-controlled components which handle the entire processing of ATM transactions. When the user inserts the credit card into the machine, and enters his PIN, one of components of ATM accepts or dispenses the card. Before allowing transactions, the ATM verifies the user’s PIN within 30 seconds. The second component stores transaction records in an auxiliary storage controller. The third component communicates with other computers for checking the user’s account balance and the fourth component synchronizes the work of the other three.
The entire processing of ATM transaction is handled by dedicated minicomputers with specialized programming capabilities housed in the bank. When the transaction is complete, an ATM releases cash upto a certain amount and in certain denominations. Later all these ATM transactions are updated, so that the bank can track the net inflow or outflow of cash.