Tuesday, September 21, 2010

Automatic Teller Machine

You're short on cash, so you walk over to the automated teller machine (ATM), insert your card into the card reader, respond to the prompts on the screen, and within a minute you walk away with your money and a receipt. These machines can now be found at most supermarkets, convenience stores and travel centers. Have you ever wondered about the process that makes your bank funds available to you at an ATM on the other side of the country?


Alright, it's just a computer mounted on the wall, with a simple keypad, a screen monitor, a built in printer, and an opening for money dispensing. The question that baffles me is the way the ATM smartly select the correct amount in accordance to our request and collect the money from various compartments that eventually comes out from the dispensing opening.

Firstly, of course, insert your card. That's the most basic instruction for using an ATM. The card reader installed within the ATM reads the information stored on the chip and request for your password. This is not much different from conventional email login, the only difference being, we carry our IP address around in the form of a card.

                                             

Once verified, you can choose various services offered by the ATM. To check your balance, the card reader will read the information stored on the magnetic strip. In fact every transaction will be recorded on the strip to enable easier tracking of transaction. That is why we have to protect the card by placing it in our wallet to avoid damaging the strip. Being magnetic, the best way to protect the card is to avoid placing it near a magnetic source, for example your handphone.


This is how bankers destroy your card when you change for a new card: cut through the strip

When withdrawing money, the computer will select the appropriate amount from each compartment (say three RM 10 and five RM50), following exactly the command written by software designers. The money will be rolled out from the cash-dispensing slot via a rubber conveyor belt. Each ATM is connected to the central computer to record each transaction on the bank's behalf. But like any computer, an ATM can be hacked. This is the time when a bank loses money without knowing it.

                                        

The cash-dispensing mechanism has an electric eye that counts each bill as it exits the dispenser. The bill count and all of the information pertaining to a particular transaction is recorded in a journal. The journal information is printed out periodically and a hard copy is maintained by the machine owner for two years.

Besides the electric eye that counts each bill, the cash-dispensing mechanism also has a sensor that evaluates the thickness of each bill. If two bills are stuck together, then instead of being dispensed to the cardholder they are diverted to a reject bin. The same thing happens with a bill that is excessively worn, torn, or folded. The number of reject bills is also recorded so that the machine owner can be aware of the quality of bills that are being loaded into the machine. A high reject rate would indicate a problem with the bills or with the dispenser mechanism.

                                    

The same electric eye is employed in a cash deposit machine. So this is probably how people get busted when trying to fool the machine into receiving counterfeited bills.

                                    

Once done, the card will be returned together with a receipt, and the ATM will beep to remind the user to take the ATM card. After a certain amount of time, most ATMs will retract the card if it is not taken so it won't be found by someone else. Smart?




Malcolm

info:
http://money.howstuffworks.com/personal-finance/banking/atm.htm/printable
http://www.ehow.com/how-does_4564295_do-atm-machines-work_.html

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