How does an ATM machine work?

An ATM dispenses money when a valid debit or credit card is inserted into the machine; the machine reads the account information from a strip that is located on the back of the card and debits the account accordingly. A debit card acts as a hard copy of the information needed to access a bank account.

All banks are interconnected via inter-bank networks like Pulse and Cirrus, among others. This network allows ATMs to quickly determine if there are sufficient funds for making a withdrawal from a bank account. The connection is made via a phone line, central computer or Internet access.