Automatic Teller Machine- Its Advantages and Disadvantages
Introduction to ATM
ATM stands for Automated Teller Machine is an electronic machine used by all bank customers holding ATM Card. The ATM machine was invented by John Shephard- Barron in the year 1960. It enables the customer to perform fast money transactions from anywhere in the world. It is used to process money transfer-related activities like Withdrawal, Fast Cash, deposit, payments, mini statements, etc. account-related transactions.
The Bank customer should possess an ATM card given by the bank in which the customer is having an account. An ATM card is a plastic card encoded with the bank customer information on a magnetic chip. This magnetic chip contains an identification code that is transmitted to the bank processor (Centralized Server) for further authentication and verifications.
Once the card is inserted in any ATM Machine, the card reader reads the information and accordingly accesses the customer account for further processing or money transactions.
Automatic Teller Machine:
The working of ATM Machine and its design is a combination of hardware and software. The role of hardware of the ATM is mainly designed for the deposit of cash, Withdrawal of cash, payments of credit cards, and for reporting purposes like the detailed or mini-information of the account. The role of software of ATM is designed to control various ATM Transactions, interactions, and updating of information on centralized databases.
Components of ATM
The most popular ATM Software works on the XFS Platform. It comprises the following software:
· Diebold Agilis Empower
· Triton PRISM
· NCR APTRA Edge
· Absolute INTERACT
· KAL Kalignite Software Platform
· Wincor NIXdorf ProTopas
· Phoenix Interactive VISTAatm
· Intertech inter ATM
· Euronet EFTS.
Working of ATM
ATM machine is consisting of two inputs and four outputs. ATM itself is a data terminal wherein all the devices are interfaced with the heart of the Machine i.e., processor. The working of ATM is dependent on the centralized database system. All the ATMs are connected with the centralized database system and communicate with the host processor or server.
Host processor communicates with the gateway of all ATM’s i.e., Internet Service Provider (ISP) acts as a gateway to all ATM networks and is available to the cardholder.
The role of Internet Service Provider is very important in the working of ATMs. It is the main connection between the server (host processor) and ATM. At the time of any transaction made by Cardholder, the information given by Cardholder as an input is passed on to the server (host processor) by the ATM. The host processor validates, verifies, and authenticates the input details with the authorized account holder’s bank. If the given details are matched and authenticated, the host processor sends the approval code to the ATM Machine so that cash can be transferred and the account holder's account can be updated.
User (Card Holder) provides necessary information through a card reader and keyboard to perform various available ATM Transactions. The information received from the user as input is forwarded to the server (host processor). This information goes to the cardholder bank through the host processor in the form of the request to further proceed with the transaction.
For Example:
When the cardholder requests cash, the cash is withdrawn from the cardholder's bank account and after deducting the requested amount update the balance in the Cardholders account and cash can be received by the cardholder in the tray of the ATM machine.
Before dispensing the cash, the amount is transferred from the User's account to the server’s bank account. The host processor once receives the amount sends the approval code to the ATM and authorizes the machine to dispense the cash.
The ATM network is based on a centralized database system and provides easily secure cash to the Card Holder.
Types of ATM Machines:
There are two types of ATMs They are:
There are so many types of AT Machines that can be installed depending upon the utility and purpose of the machine to facilitate as per the requirement of the customers or users. Most of the server or host processors support Leased line Machines. These are:
1. Leased Line ATM Machine
2. Dial-Up ATM Machine
3. On-Site ATM
4. Off-Site ATM
5. Cash Dispensers
6. Mobile ATMs
7. Various Labelled ATM’s
Types of ATM’s
Different Labelled ATM’s
Steps to Operate ATM Machine
Advantages of ATM
Available 24 x 7
Can withdraw cash from any location, no need to carry Cash.
It saves time and one can withdraw the amount within a fraction of seconds.
To withdraw and deposit the amount, no paperwork is required.
It is secured as only the person who knows the ATM Pin can withdraw the amount.
It reduces the time of bank employees and customers.
Disadvantages of ATM
In case of ATM card damages, Cash withdrawal is not possible.
ATM pins can be hacked and can be misused by anyone.
The risk of theft is high.
Extra charges to be given in case you do transactions from different banks ATMs
Many issues of theft of money from ATMs are been observed.
Cannot withdraw money in the case, ATM machine does not have in it the sufficient balance.
Some fraud people deposit wrong and fake currencies.
Sometimes fake currencies are been withdrawn.
No authentication is done while cash withdrawal and deposit of money, whether it is real or fake.
(Department of Information Technology and Software Development)
