ATM is such an automated electronic banking machine in which if a customer uses his ATM card and provides all the correct information, then he can easily withdraw and send money from his bank account. ATM machine is also called Automatic Teller Machine.
If seen, there are mainly two types of Automatic teller machines (ATMs). The first one is Basic ATM which helps customers to withdraw money and view their account report. Whereas the second ATM is a bit complex because its functions are a bit complex, like in this you can report deposits, credit card payment facilities and account information.
So without any delay, let’s start and know what this ATM is and complete information about how to use it.
Read More:- How to Open A Bank Account?
What is ATM?
ATM machine is a banking electronic device which can be used only by the customers of the bank. It is used to do any account related transaction.
Here users use a special type of plastic card to access their account in which the user information is already encoded on a magnetic strip on the back of that card.
There is an identification code in this magnetic strip which when the card is used, that identification code is sent to the bank’s central computer through modem.
So when the user inserts his card in the ATM to access his account, then matching of that identification code is done automatically so that if the code matches then the account transaction is processed.
What is the full form of ATM?
The full form of ATM is Automated Teller Machine.
What is ATM called?
ATM is called Automatic Teller Machine.
History of ATM
The inventor of ATM or automatic teller machine was John Shepherd-Barron who invented it in 1960. It is called automatic calculating machine in Hindi. Along with this it is also called Automatic banking machine, cash point, Bankomat.
The modern generation ATM was first used by Barclay’s Bank of London on June 27, 1967. Earlier in the 1960s, ATM was known as Bancograph, it is believed that it was first used in London and the credit for its invention is given to John Shepherd-Barron. He was born on 23 June 1925 in Shillong, Meghalaya in British India.
Baron was in favor of making the ATM PIN 6 digits, but his wife told him that 6 digits was too many and people would not be able to remember it. For this reason, he later created a four-digit ATM PIN. Even today only four digit PIN is in use.
ATM facility was started in India for the first time in 1987. The first ATM in India was installed by Hong Kong and Shanghai Banking Corporation (HSBC) in Mumbai. Nowadays, use of ATM has become an important part of daily routine. Because whenever an invention occurs, necessity is its originator.
Similarly, the need of ATM arose in western countries when those people or financial institutions had to face problems due to the demand of increasing the salaries of the employees handling cash related work and the lack of well-skilled people.
That is why after the invention of ATM, many bank functions became possible through ATM because a lot of work can be done in self service. For this one does not have to depend on the bank employee. But when the idea of ATM came to the mind of its inventor, he had to face a lot of difficulties.
Because even at that time, banks considered money transactions as a very sensitive matter and they did not accept leaving such money in the trust of any machine. This was a big risk, so no bank was ready to use it.
Even after this, Luther did not lose courage and spent 21 years of his life continuously in its development, after which he applied for its patent in ‘June 1960’. And in February 1960, he also got its patent.
How to withdraw money from ATM
By now you must have known about ATM. Now comes the turn of how we can withdraw money when we have ATM card. To understand this process, I have explained it in full detail below. You can read its description below.
1. First you have to find the ATM near your area, if possible then it would be even better if it is an ATM machine of the same bank as the ATM near you. By the way, if you want, you can withdraw money from any bank’s ATM.
2. Now put your ATM card in the machine. You will see the method of this process in the instructions posted in front of the ATM machine. Insert the ATM directly and there is usually a green light. Insert the ATM straight into the machine otherwise the machine will not be able to read it. If it is not read, you will be asked on the screen to insert it again.
3. Once the ATM machine reads your card, it will give you the option to select the language. The main languages used in ATMs are English and Hindi. You can choose one of these two languages as per your convenience.
4. Now the machine asks for your PIN for your work. This PIN is the same PIN which is given to you by the bank along with or in connection with the ATM. Which you do not have to share with anyone.
5. Once you have entered your correct PIN, a new page will open on the screen. Now you have to select the type of your account. Such as Saving Account (Savings Bank Account) or Current Account (Current Bank Account). Whatever it is, you can choose it appropriately.
6. After selecting the account type, you will have to enter the amount you want to withdraw. Keep in mind that different banks and different accounts have different limits for withdrawal of money. For this, confirm this thing with that bank beforehand.
7. Once you enter the amount and click on OK, your entered amount will come out from the machine. And in this way you can withdraw your money from ATM very easily. Keep in mind that more amount should be deposited in your account than the amount you have deposited, otherwise you may have to pay some fees for it.
8. In this way your first transaction is completed.
9. If you want to withdraw money again, this option is also given there. Otherwise, if you press the cancel button, your transaction ends there.
Devices of Automatic Telling Machine:
The Automatic telling machine mainly has two input devices and four output devices, about which I have explained below.
Input Devices:
- Card reader
- Keypad
Output Devices:
- Speaker
- Display Screen
- Receipt Printer
- Cash Depositor
Input Devices of ATM:
1. Card Reader
Card Reader is an input device which reads data from the card. Card Reader is a part of identification of a specific account, along with it the magnetic strip which is present on the back side of the ATM card is used to make connection with the Card Reader.
When the card is swiped in the card reader, it captures all the information present in that magnetic strip, i.e. the data received from the card is passed to the host processor (server). Then the Host Processor uses that data to extract information about the cardholders.
2. keyboard
The card is recognized only when the machine asks you for further details such as your Personal Identification Number (PIN), withdrawal and your balance enquiry. All cards have unique PINs so that there is very little chance that someone else will withdraw money from someone else’s account.
There are different rules to protect the PIN code when it is sent to the host processor. The PIN is sent in encrypted form. The key board contains 48 keys and they are interfaced with the processor.
Output Devices of ATM:
1. Speaker
The speaker produces audio feedback whenever a particular key is pressed.
2. Display Screen
Display screen displays transaction information. All the steps of withdrawal are shown in the display screen. CRT screen or LCD screen is used in all ATMs.
3. Receipt Printer
Receipt Printer shows your complete details like your withdrawal, date and time, amount withdrawn and the balance in your account in the receipt.
4. Cash Dispenser:
The heart of any ATM is the Cash Dispenser. This is the central machine of any ATM machine from where the required money is withdrawn. Any user can collect his money from this portion.
The main job of the Cash Dispenser is to first count each bill and then withdraw the required money. If a note ever gets folded, it is sent to another section and you will get a rejected bill in the output. All these things happen with the help of high precision sensors. Records of all ATM transactions are maintained with the help of RTC device.
ATM Networking:
Internet Service Provider (ISP) also plays a very important role in an ATM. They provide communication between ATM and Host Processors. Whenever a transaction takes place, the details are all input by the card holder.
This information is sent to the host processor with the help of ATM machine. The Host Processor checks all those details with the authorized bank’s server. If those details match, then the host processor sends the approval code to the ATM machine so that you get your cash money.
Types of ATM Machines
Mainly Host Processors support only two types of ATM Machines which are mentioned below.
- Leased line ATM machines
- Dial-up ATM machines
Leased Line ATM Machines:
These leased line machines are directly connected to the host processor with the help of four wire point to point dedicated telephone line. This type of ATM machines are very much liked. The operating cost of such machines is also very high.
Dial-Up ATM Machines:
These dial-up ATM machines are connected to the processor through a modem with the help of a normal phone line. These types of ATM machines require normal connection and their initial installation cost is also much lower as compared to leased line ATM machines.
ATM Security:
PIN is used to keep the ATM card safe, which is kept very secret. There is no way by which ATM PIN can be removed from your ATM Card. It is encrypted with the help of strong encryption software such as Triple data Encryption.
Automatic Teller Machine Working Principle:
Automatic teller machine has a simple data terminal which has two input and four output devices. All these devices are interfaced with the processor. Processor is the heart of the ATM machine.
All ATM machines in the world are based on centralized database system. ATM has to connect and communicate with the Host Processor (Server). Host Processor also communicates with the Internet Service Provider. It is like a gateway which is available to all card holders in all ATM networks.
Whenever a card holder wants to do any ATM transaction, then all the required information has to be provided to the user with the help of card reader and keypad. ATM forwards all this information to the Host Processor.
The card holder then sends a transaction request to the cardholder’s bank. If the card holder sends a request for cash, then the host processor withdraws the money from the card holder’s account.
Once the funds are transferred from the customer account to the host processor bank account, the processor sends the approval code to the ATM and instructs the ATM machine to provide the required cash to the customer. Only through this process you can get money from ATM.
The entire ATM network is based on centralized database environment. It makes people’s lives easier.
Advantages of Automatic Teller Machine:
Now let us know about the advantages of Automatic Teller Machine:-
- ATM provides 24 hours service
- ATM provides privacy in banking communications
- ATMs reduce the workload of banks employees
- ATM provides new currency notes to the customer.
- ATMs are a good option for bank customers
- ATM is very useful for travelers
- ATM provides service without any error
Some features of Automatic Teller Machine:
Now let us know about some features of Automatic Teller Machine:-
- You can transfer funds between linked bank accounts
- Here you can receive account balance
- You can print your recent transactions list
- You can easily change ATM Pin
- You can easily deposit cash here
- Can recharge prepaid mobile
- Can make bill payments
- Can withdraw cash
How to withdraw money from ATMs or Auto Teller Machines?
Now let us know how we withdraw money from ATM machine:-
- First the card is validated: It checks whether the debit/credit card used by you is accepted by the machine or not.
- Account number is read: Your account number which is present in your card is encoded in black magnetic script and it is present on the back of the card.
- Validates the user: To validate the correct user, they are asked about the 4 digit pin code. Whose validity is only when the correct answer is given.
- Connects to the network: All the information given by the card holder (account number, pin code) is validated with the help of satellite network in the bank network. ATMs often have a dish antenna that they use to communicate with the bank’s network using satellite.
- Dispenses cash: In the last step, after everything is validated, cash is dispensed with the help of ATM. And the user gets cash.
After this the receipt of the transaction is printed and with this the transaction ends. ,
Precautions to be taken while using ATM
So let us now know about some such precautions which if a common customer follows then he can save himself and his money from spammers and online hackers. Following are the general precautions related to ATM and debit card security:
- Keep your card safe – You should keep your card safe just like cash money. Because if it gets lost someday then you may have to face a lot of problems for it.
- Keep your PIN secret – You have to keep this in mind that never share your ATM PIN with anyone. Or don’t keep it written down anywhere. Always remember this. At the same time, you should change your ATM PIN from time to time, because even if someone accidentally knows your PIN, he cannot do anything.
- Do not share any information regarding your card with anyone over the phone – Nowadays, many people try to fool you through telephone and know your PIN and then use it to withdraw money from your account. You should keep one thing in mind that your PIN number is a very important number, no one else has the right to know it, even your bank will never try to know it from you. So do not share your PIN number with anyone.
- Do not disclose any information related to your card – No matter who it is, you should not disclose information related to your card or bank to any person. You should never reply to any unsolicited mail related to your card information. Remember that your bank never demands such information from you.
- While shopping on the internet, you should keep in mind that your shopping site is secure – Nowadays it is the online era and in such a situation we often do online shopping. Which is appropriate to do but you should always keep in mind the secure shopping symbol. Whenever you shop, do not forget to logout from the site after payment. Try to use your own system or computer or smartphone because there is a chance of viruses in other people’s computers.
- Report immediately if your card is lost or stolen – The security of your card is completely yours but if your card is lost then you should immediately report it and get it blocked so that no one misses it. Cannot be used. Keep this in mind.
- Check your bank account statement immediately – You should take the service of making your account statement available on your mobile from your bank so that you can check it immediately while using ATM or during any other online transaction. If you see any wrong transaction in your statement, you should complain about it immediately.
- Be sure to link your bank account with the registered mobile.
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