An ATM is simply a data terminal with two input and four output devices. Like any other data terminal, the ATM has to connect to, and communicate through, a host processor. The host processor is analogous to an Internet service provider (ISP) in that it is the gateway through which all the various ATM networks become available to the cardholder (the person wanting the cash).
Most host processors can support either leased-line or dial-up machines. Leased-line machines connect directly to the host processor through a four-wire, point-to-point, dedicated telephone line. Dial-up ATMs connect to the host processor through a normal phone line using a modem and a toll-free number, or through an Internet service provider using a local access number dialed by modem.
Leased-line ATMs are preferred for very high-volume locations because of their thru-put capability, and dial-up ATMs are preferred for retail merchant locations where cost is a greater factor than thru-put. The initial cost for a dial-up machine is less than half that for a leased-line machine. The monthly operating costs for dial-up are only a fraction of the costs for leased-line.
The host processor may be owned by a bank or financial institution, or it may be owned by an independent service provider. Bank-owned processors normally support only bank-owned machines, whereas the independent processors support merchant-owned machines.
FAQs
To use an ATM, you typically insert your bank cards and follow the prompts to withdraw cash, which is dispensed through a slot. ATMs require you to use a plastic card—either a bank debit card or a credit card—to complete a transaction. Your identity is authenticated by a PIN before any transaction can be made.
How do ATMs get money? ›
“When a business allows an ATM to be placed at their location, they have the opportunity to earn a commission,” said Paul Carriere, an attorney at Favret Carriere Cronvich. “The simplest way to conceptualize earning a commission is when a person uses an ATM, there is a 'surcharge,' a fee for using the ATM.”
How do ATM transactions work? ›
When a withdrawal is selected the transaction is processed and, if approved, your bank debits your account for the amount. This transaction is sent back through the ATM networks and processor to the ATM. The mainboard then initiates the dispensing of the cash.
How do ATMs connected to banks? ›
Leased-line machines connect directly to the host processor through a four-wire, point-to-point, dedicated telephone line. Dial-up ATMs connect to the host processor through a normal phone line using a modem and a toll-free number, or through an Internet service provider using a local access number dialed by modem.
Can I own my own ATM? ›
First, you need to buy or lease an ATM machine. Then, find a good place to put it, like a busy store or a mall, where lots of people will use it. Remember, you make money from the fees people pay to use the ATM, so the more people use it, the more money you can make.
How profitable is owning an ATM? ›
Potential Income from Owning an ATM Machine
On average, ATM surcharge fees range from $2.50 to $3.00 per transaction. Assuming an average of 6 daily transactions, you could earn $15 to $18 daily, or $450 to $540 monthly, from a single ATM machine.
Who puts the money in ATMs? ›
Obviously, ATMs at banks will be refilled by the bank itself. However, for standalone ATMs, there are a few different options when it comes to the responsibility of refilling the machine. If a business is the outright owner of its ATM, they have the option of refilling the machine on their own.
How much does it cost to own an ATM? ›
Before you learn how to buy an ATM, you need to understand how much it costs. The average retail ATM machine costs around $3,000 but can range from $2,000 to $8,000 depending on the included features.
Do ATMs record you? ›
Hidden Camera
A concealed camera is typically used in conjunction with the skimming device in order to record members typing their PIN into the ATM keypad. Cameras are usually concealed somewhere on the front of the ATM.
Is ATM money traceable? ›
Yes, ATMs can trace the dollar bills they dispense. ATMs are equipped with a variety of security features, including sensors and cameras, that allow them to monitor and record activity in and around the machine.
Banks also pay fees to ATM networks during each ATM transaction called an interchange. Some ATM networks take some of the money they earn from the interchange and give it to the ATM owner, particularly when an ATM has a high volume of transactions.
Do all ATMs work with all banks? ›
Although you can withdraw funds from any bank's ATM, you must have an open and active account with that particular bank to use their ATM to deposit a check. Third-party, out-of-network ATMs typically do not accept deposits for accounts at other banks.
What are the 7 ATM withdrawal steps? ›
ATM withdrawals are fairly straightforward, even if ATMs vary in specifics.
- Insert your card into the machine when prompted.
- Enter your PIN.
- Select the transaction type (withdrawal, in this case).
- Select the account from which you wish to withdraw.
- Take your card back and wait for your money to be dispensed.
Enter your ATM PIN: Input your Personal Identification Number (PIN) to securely access your account. Choose the 'FUND TRANSFER' option: Navigate through the options displayed on the ATM screen and select the one that allows you to transfer funds. This option may be labelled as 'FUND TRANSFER' or similar terminology.
How can I withdraw money from ATM with no money in account? ›
If you choose to opt in to debit card and ATM overdraft, you are usually allowed to make ATM withdrawals and debit card purchases even if you do not have enough funds at the time of the transaction. However, you will generally incur fees on transactions that settle against a negative balance later.
