Automated teller machine helps the customers to do some of the banking transactions without the help of any banking executive. There are two types of devices. One is that which allows users to withdraw cash and receive a receipt containing account balance. Another machine is a complex one, which people can use to deposit some money, perform credit card payments, and also get a mini report of their account.

This electronic machine helps the people to complete underlying bank transactions, and they have to use a particular type of plastic card in which their personal information is encoded on a magnetic strip. The code on the piece is transferred to the computer in the bank with the help of modem. As soon as the card is inserted into the machine, it processes the account transaction. The device was invented in 1960 by John Shepherd-Barron. Let us talk about the components of the machine.

Input devices

Input devices are used to read data and send it to the server for further processing. The input devices used in the machine are as follows:

Card Reader

The card reader presenting the computer reads the card when a person inserts the card. This input device identifies the account number of the user with the help of the magnetic strip present in the map. The card reader reads the information present on the card and passes the data to the server. The host processor receives the data from the cardholders in this way.


After the user inserts the card, and the data is read, the next step is to use the keyboard to provide further data, and the most important is the personal identification number or PIN. After inputting the PIN, he will get a list of transactions like cash withdrawal, balance inquiry, etc.

Output devices

Output devices are used to write the data and display it. The output devices used in these machines are discussed here.


When the user presses a key or enters any information, he gets a message to do the next step through the speaker. If he comes wrong information, the speaker tells of opening the news again.

Display Screen

The screen displays the information about the transaction along with the steps of each of the sale. For example, if a user wants to withdraw money, he gets the option of the type of account he has to select, and then he has to enter the amount.

Receipt Printer

The printer provides detail about the transaction that the user has performed. If he has withdrawn money, he receives a printout stating the amount withdrawn and the balance left in the account. If he has made balance inquiry, he gets the information about the balance in the receipt.

Cash Dispenser

Cash dispenser is a central system from where the cash amount comes out, and the user has to collect the cash from here. The cash dispenser first counts the amount entered by the user, and then it dispenses the liquid. There is an RTC device in the machine that keeps the records of all the transactions.

Types of ATMs

There are two types of ATMs, which are discussed here.

Leased Line ATMs

These machines are directly connected to host processors with the help of four-wire point to point telephone lines. The cost of operating this machine is very high.

Dial-up ATMs

This machine is connected to the host processor with the help of phone line and modem. The installation and operating cost of these machines is meager.

Wrapping Up

In this article, we have discussed automated teller machines, its components, and types. These machines are beneficial and have reduced the burden of bank employees and are also comfortable for users.