How does an ATM know when to refuse a transaction e.g. money withdrawal or else?
And how does it know which card type it is? (Visa, Mastercard, etc.)
In: Economics
An ATM connects to a bank’s infrastructure for all of its operations. Things within that infrastructure hold all customer data and likely all of the actual processes making the decisions as to whether to permit transactions or not, and the ATM simply receives these decisions and acts upon them (e.g. dispense some money or print something saying the transaction was refused).
The same stuff would also know what to do with the cards presented to it. There are multiple networks connecting banks and other financial institutions and so if a customer of bank A goes to bank B (possibly halfway around the world) and asks for some money, bank B won’t know anything about the customer, but will know that the card presented is for bank A, and relay the request back to bank A which will make the determination. This also allows bank A to appropriately debit the customer’s account.
If I recall correctly, different cards start with different prefixes; e.g. anything starting with 4 is Visa, anything starting with 5 is Mastercard, etc. I’m sure it’s much more complicated than that.
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