When you slide your bank card into an ATM, it instantly identifies you – but how does it do that? The secret is in two parts of your card: the magnetic stripe and the tiny chip.The black magnetic stripe on the back stores basic details like your account number, sort code, and bank identification. The embedded chip, however, is much smarter. It contains encrypted information – a digital lock that only your bank can open.When you insert the card, the ATM’s reader scans the magnetic stripe and then communicates with the chip. The chip sends a coded message to the ATM, which passes it to the bank’s central computer. This message is unique for each transaction, making it harder for fraudsters to copy your card.The ATM then prompts you to enter your PIN. Before sending it to the bank, the machine encrypts the PIN – turning it into a jumble of characters that cannot be read by anyone in between. The bank compares it to the secure record stored in its database. If it matches, the ATM allows you to withdraw money, check your balance, or make other transactions.The entire process takes just a few seconds, but it’s carefully designed to protect your money. If the chip is damaged, the stripe is scratched, or the wrong PIN is entered too many times, the ATM will block the transaction or even retain the card. These safety measures prevent unauthorised use and keep your account secure.So, the next time an ATM greets you with “Please enter your PIN,” you’ll know there’s a rapid, invisible conversation happening between your card, the machine, and your bank – all working together to confirm that you’re the real owner of the account..The first ATM didn’t use cards at allThe world’s first ATM, installed in London in 1967, used paper vouchers instead of plastic cards..Your card’s chip creates a unique code each timeEvery ATM transaction generates a one-time code, making it nearly impossible to reuse stolen data..Magnetic stripes were inspired by cassette tapes The same technology used for storing music on tapes was adapted to hold banking data on cards..PINs were originally six digits longThey were shortened to four digits because the inventor’s wife found longer ones too hard to remember.
