ATM Full Form | Automated Teller Machine | Banking Full Form

Automated Teller Machine (ATM)

Last Updated by Monika Dadool 25-Nov-19

0 2008

The main objective of developing this machine is to dispense cash to the people and also help them to check balance present on their specific account. In other words, we can say that it is an electro-mechanical system developed for generating financial transactions.

ATM has made the banking process so simple that one can easily deposit and withdraw cash as per her/his requirement.

The requirement of operating an ATM

ATM operates with Debit cards. For withdrawing any money, there is a need of one card known as a debit card containing the name of the bank that it belongs, card numbers which are given to each customer, Name of the cardholder and its validity and on the backside of the card, there are magnetic strips in which all the account information are stored.

Components of ATM

ATMs consist of both inputs as well as output devices to permit people for performing processes like depositing withdrawing, balance inquiries, etc. Card reader and keypad are the input devices found in an ATM machine and whereas a receipt printer, display screen, card dispenser, and speaker are the basic output devices found in ATM

Steps of Operating

1. Card swiping

2. Pin entering

3. Request amount as per requirement


We all are aware of the ATMs of different banks, HDFC, ICICI bank ATMs, etc. All banks have their ATM installed in the markets and neighborhoods, malls, etc.

We all are using debit cards for withdrawing money but we have various questions in our mind that how one plastic machine can able to give us cash, how it gives accurate money that we have entered, how we can able to withdraw money from different banks for example how we can withdraw money from axis bank through SBI ATM, how it works, how our account link to it and many other small questions that arise while we are using ATM.

Lets us know the working of ATMs and try to know about input and output devices used in the ATM machine along with the role. To initiate ATMs functioning, we swipe the cards and in some machines, there is a requirement of inserting a debit card.

Swipe Card

When we insert our card in the machine. The machine firstly analyzes the card whether it is original or fake. It will generate an error message if it analyses a duplicate or tempered card. This process is done internally with the help of an input device i.e. card reader.

The main function of the card reader present in ATM is to read the internal information and store the account information on the magnetic strips of the card. Some time error messages are also because of scratches on the magnetic strips of the card.

PIN Entering

Every account or debit holders are provided with a security pin number from the banks which is of 4 digits.

Pin provided by the users takes place by the keypad device. Once a user enters the pin, the machine converts that PINs into encryption and then further send it to the host processor which links it to a Bank terminal.

The host computer performs a comparison with stored information for the validation process. After pin validation, the user can get his/her account access.

Request Amount

In this step, the request is sent to the host processor which further forwards that request to the networks for getting validation. When the user enters the amount of money it checks different drawers.

Different notes 100, 200, 500 or 2000 are present in different drawers. The machine picks every single note and passes it to roller where there are sensors that were used for investigation and validation of note thickness.

The purpose of them is to manage the accuracy of money so that people can get a valid amount not less nor more. If the thickness varies, the machine assumes that note is tempered, fake it put that notes into the extra tray where reject notes are there. The dispenser present inside the machine dispenses the cash-out and users get their cash.

The information of this transaction is also sent to the bank servers due to which users' money deduct. Card dispenser act as a mandatory output device that permits dispense of the accurate amount of cash as per user requirement.

For audio feedback, speakers are there and for acquiring detail of transactions, receipt printers are there which provide the user the receipt containing every mandatory information such as date, time, etc.

Types of ATM

According to different parameters aspects ATMs are categorized that are as under:

  • Brown label ATM
  • Off-site ATM
  • Orange label ATM
  • Green label ATM
  • White label ATM
  • Mobile ATM
  • Worksite ATM
  • Onsite ATM 

Various Operations of ATM

ATMs are integrated with advanced functionality day by day. They are able to do multiple tasks apart from dispensing cash. Few of the tasks are given below :

  • Permits fund transfer
  • Balance inquiry
  • Mini statement
  • Mobile recharge and bill payments and many other tasks
  • Permits cheque and cash deposit 

Enhancement of ATMs

With the rapidly growing technology, Some Global banks have enhanced ATM features and try to develop gradually for simplifying users' experience. Some professions are given below:

  • Bio-metric ATMs
  • Solar-powered ATM
  • Live teller video conferencing
  • Accessing card-less ATMs


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