In a regular bank setting, we would walk up to the teller, request our cash, and then it would be counted by the teller and handed to us. We walk away assured that the teller debited our account for the correct amount.
A typical ATM transaction allows the cardholder at the ATM machine to withdraw funds from an account or deposit funds to an account. As a user, if withdrawing funds, we take our cash and walk away from the machine, never giving a thought as to what went into making the transaction happen. Little does the user know there is a network communicating all of the transaction information behind the scenes.
How Does an ATM Network Work?
ATMs operate through a network; most are commonly connected to an interbank network. These networks make it possible for a person to perform a transaction at an ATM that does not belong to their bank, and in some cases, out of the country where their bank is located. There are many types of interbank networks, including Cirrus, PLUS, NYCE, STAR, PULSE, BancNet, AFFN, among others.
Once a transaction is performed at a machine, the network communicates the information to the proper bank, where the information is recorded to the user’s account. The communication with the network happens much like our home computer would with an internet connection. Most ATMs connect to a host, or sometimes known as an ATM Controller, through an asymmetric digital subscriber line (ADSL) or through a dial-up modem, which would be run through a phone line. If using the dial-up modem method, this is usually a specifically designated or leased line, rather than sharing a telephone service line. The method that an ATM owner chooses to use should be based on the amount the machine is being used. If the machine is being continuously used throughout the day, a dial-up modem might be slower and not the most efficient way to get the user’s the quick cash they are looking for. After all, you want the customer to keep coming back and using your machine.
As technology advances, many new ATM owners are now using connections through virtual private networks (VPN), or commonly known as a high speed internet connection and new wireless devices such as cellular networks using dedicated wireless devices hidden in top of the ATM. There are still older methods of communicating to a bank that are still in use; some of these include Async, which is short for asynchronous communications, where transactions are communicated intermittently to the bank versus the immediate moment the transaction is completed; and Systems Network Architecture (SNA), which to date itself, was created by IBM in 1974, and is a method that interconnects the ATM with the bank.
All of this may be irrelevant for someone in a hurry, running in to the local convenient store to get the $40 they need for the night; but nonetheless, it is the network communications of the ATM and the bank that are making the transaction possible for this rushed money grabber.
If you plan to own and operate ATM Machines as a business or in your business, the cheapest way to access the ATM Networks via your ATM processor these days is to simply add the ATM to your high speed internet connection. A slow connection or high noise on the line may cause errors so consult your ATM company or your computer people prior to determining the best communication method. We are seeing most new ATMs deployed these days are using the latest wireless communication systems which are available for lease for less than the cost of a phone line. Ask your ATM company about the wireless communication options available for your ATM.