Have you ever wondered what happens behind the scenes when you withdraw cash from an ATM? How does an ATM that you use to access the farthest reaches of the world identify your secret personal identification number (PIN) and the balance in your account? Are you frustrated and angry when the ATM asks you to withdraw your PIN, account type and amount, just to say that your PIN is incorrect or your account does not have enough balance?
An ATM is basically a central application called a switch through a computer connected to a screen, a computer reader, a secure chest with different denominations of notes, a distribution outlet and a secure network. Unless instructed by the switch, the ATM itself cannot perform any transaction.
Let’s look at the various parts of the ATM that you can see standing in front of it.
Card Reader Slot: This is the slot in which you enter your card. Most ATMs in India have deep card readers where you have to enter and release your card in the card slot. Some ATMs may even have a motor card reader where after entering the card it goes to the ATM and then comes out. Why do you need to do this? Your card will have a contrasting black or brown magnetic stripe. This magnetic bar contains details such as your card number, expiration date and card verification value (CVV). The ATM does not read the printed design or logo on your card or card number, name or expiration date. Everything he reads is data encoded on a magnetic stripe. You can also have a chip card – a piece of gold metal on your card. It has the same details as the magnetic stripe of the lata. Soon, India’s ATMs will start reading the chip, not even the magnetic belt.
Screen: Most ATMs have 10 to 15 inch screens on both sides, with four buttons. Just like your smartphone, some screen touch will be enabled. Depending on the type of screen, you have to use the button next to the screen or tap on the screen to select your options. Most ATMs give you the option to select Hindi, English and local languages.
Pin Pad: The numeric pad is the pin pad at the bottom of the screen. Once you enter your card and the ATM is able to read your card, a welcome message will ask you to enter your PIN. Your PIN is a code that allows the card to use more cash. Once you enter the PIN, the ATM will ask you to withdraw the amount. You use the pad again for the amount you want to remove.
Once the ATM reads your card, PIN and the amount entered, it will send a secure message with all the details on the switch. If the ATM you are using falls under the card issuing bank, the switch will process the message. If the ATM belongs to another bank, the switch network of the bank will send to the National Financial Corporation (NPCI) National Financial Switch or the bank such as Visa or Master Card or any other payment network.
That network will in turn send a message to your bank’s switch. Your bank switch does not store your PIN and so it will send the PIN to the security module associated with it, to know if the PIN is correct. Using very sophisticated algorithms, the security module decodes the parameters and checks whether your PIN is correct. If true, the switch will send a message to your bank’s core banking system (CBS). CBS will investigate whether the account is a valid account and whether the account has the required balance. If there is sufficient balance, CBS will debit your account and send the switch a confirmation, which, in turn, will send a message to withdraw money from the ATM. It all happens in seconds and the ATM sends you the required amount through the cash distribution slot.