Using the ATM

A cash machine, also known as an Automated Teller Machine, is an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions, particularly cash withdrawal, without the need for a human cashier, clerk or bank teller.

On most modern cash machines, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number.

Using a cash machine, customers can access their bank deposits or credit accounts in order to make a variety of transactions such as cash withdrawals, check balances, or credit mobile phones. If the currency being withdrawn from the cash machine is different from that in which the bank account is denominated, the money will be converted at an official exchange rate. Thus, cash machines often provide the best possible exchange rates for foreign travellers, and are widely used for this purpose.

Most cash machines are connected to interbank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their accounts or in the countries where their accounts are held (enabling cash withdrawals in local currency).

Cash machines rely on authorisation of a financial transaction by the card issuer or other authorising institution on a communications network. This is often performed through an ISO 8583 messaging system.

Many banks charge cash machine usage fees. In some cases, these fees are charged solely to users who are not customers of the bank where the cash machine is installed; in other cases, they apply to all users.

In order to allow a more diverse range of devices to attach to their networks, some interbank networks have passed rules expanding the definition of a cash machine to be a terminal that either has the vault within its footprint or utilises the vault or cash drawer within the merchant establishment, which allows for the use of a scrip cash dispenser.

Using bank cards

A bank card is typically a plastic card issued by a bank to its clients that performs one or more of a number of services that relate to giving the client access to funds, either from the client’s own bank account, or through a credit account. It can also be a smart card.

Physically, a bank card will usually have the client’s name, the issuer’s name, and a unique card number printed on it. It will have a magnetic strip on the back enabling various machines to read and access information. Depending on the issuing bank and the preferences of the client, this may allow the card to be used as an ATM card, enabling transactions at Automatic Teller Machines; or as debit card, linked to the client’s bank account and able to be used for making purchases at the point of sale; or as a credit card attached to a revolving credit line supplied by the bank.

Historically, bank cards have also served the purpose of a cheque guarantee card, a now almost defunct system to guarantee cheques at point of sale.

While giving examples of different bank cards, http://www.nolo.com reported that credit cards, charge cards, ATM cards and debit cards are all ways to make purchases or get cash. But each one works differently and these differences are important. In order to use these cards wisely, you should know what each one is and how they differ from the others.

ATM cards are issued by banks, essentially to give their customers flexibility in their banking hours. In most areas, you can use an ATM card to withdraw money, make deposits, transfer money between accounts, find out your balance, get a cash advance, and even make loan payments at all hours of the day or night.