ATM verification work by:

Object 1: verification by codes

Verification is performed by means of an RFID reader, which detects the number on the card.
Authorization is considered successful if this number matches the number in the system4.

These codes allow debit cards to be used online just like you could with a regular credit card. This
numeric code is separate from the debit card number and verifies that the person providing the debit
card details in a transaction has the card in their possession1.

Verification codes act much like two-factor authentication for online logins, adding a layer of security.
With verification code technology at cardless ATMs, you’ll use your mobile banking app for the majority
of your transaction2.

ATMs require you to use a plastic card—either a bank debit card or a credit card—to complete a
transaction. Your identity is authenticated by a PIN before any transaction can be made. Many cards
come with a chip, which transmits data from the card to the machine. These work in the same way as a
bar code that is scanned by a code reader5.

Debit cards also use a unique PIN code or identification verification code, consisting of 4 numbers that a
cardholder can create at their discretion. The PIN code is not applied to the surface of the card. It should
be entered on the keypad when withdrawing cash from an ATM or paying for in-store purchases using a
terminal3.

Object 2: verification by card

Customers are typically identified by inserting a plastic ATM card (or some other acceptable payment
card) into the ATM, with authentication being by the customer entering a personal identification
number (PIN), which must match the PIN stored in the chip on the card (if the card is so equipped), or in
the issuing financial institution's database.

TRANSACTION
When a cardholder wants to do an ATM transaction, he or she provides the necessary information by
means of the card reader and keypad. The ATM forwards this information to the host processor, which
routes the transaction request to the cardholder's bank or the institution that issued the card. If the
cardholder is requesting cash, the host processor causes an electronic funds transfer to take place from
the customer's bank account to the host processor's account. Once the funds are transferred to the host
processor's bank account, the processor sends an approval code to the ATM authorizing the machine to
dispense the cash. The processor then ACHs the cardholder's funds into the merchant's bank account,
usually the next bank business day. In this way, the merchant is reimbursed for all funds dispensed by
the ATM.
So when you request cash, the money moves electronically from your account to the host's account to
the merchant's account.

The ATM transaction process involves the following steps:

 Insert your card into the ATM with the card’s chip facing forward.
 Choose a language if prompted.
 Enter your PIN and follow the onscreen prompts to complete your transaction. You can
withdraw cash, deposit, transfer, or check your balance.
 The ATM contacts your bank through a special line to verify your account information and
process your transaction.
 Take your card, cash, and receipt when the transaction is done.