Technology
How does an ATM work?
An ATM works by securely connecting to your bank over a network to verify your card and PIN, then dispensing cash and updating your account. It is essentially a secure, automated teller linked in real time to the banking system.
See it in motion.
Watch a 2-minute animated lesson that shows exactly how an ATM works.
Step by step
- 1You insert a card; the ATM reads your account details from its chip or magnetic stripe.
- 2Your PIN is encrypted and sent to the bank to confirm it's really you.
- 3The bank checks your balance and approves or declines the withdrawal.
- 4A precise mechanism counts and dispenses the exact bills requested.
- 5The transaction is recorded and your balance updated, often instantly.
Frequently asked questions
- Is it safe to type my PIN at an ATM?
- Your PIN is encrypted before it leaves the machine and isn't stored on the card itself. Still, cover the keypad and watch for tampering or skimming devices.
- How does an ATM know my balance?
- It doesn't store it — it connects in real time to your bank's systems over a secure network to check funds and record the withdrawal.
- What is a skimmer?
- A fraudulent device attached to an ATM to steal card data. Inspect the card slot for anything loose or bulky, and cover your PIN as you type.