Blog Post
How to Automate 3-Way Matching for ATM Cash Management
For bank operations teams, ATM reconciliation is a unique beast. Unlike standard invoice matching, an ATM transaction has three distinct "sources of truth" that often disagree. When they do, the result is either a loss for the bank or an angry customer. In 2026, relying on 2-way matching (just Bank vs. Switch) is a liability. This guide explains why 3-Way Matching is the only safe standard and how to automate it using modern tools like Reconwizz.
The "Triangle of Truth": Why 2-Way Fails
Most banks perform a simple 2-Way Match: they compare the ATM Switch (which routed the transaction) to the Core Banking System (which debited the customer's account). If these two match, the transaction is marked "Success."
The Trap: This ignores physical reality. What if the Switch approved the transaction, the Core debited the account, but the ATM hardware jammed and only dispensed $20 of the requested $100? The Switch says "Success," the Core says "Debited," but the customer was shortchanged. Without the third leg—the Electronic Journal (EJ) or physical count—you have a hidden liability.
The Three Data Legs
- 1. The Switch (Network): The digital instruction. Contains the RRN, Auth Code, and Card Number.
- 2. The Core (Host/GL): The financial accounting. Contains the actual debit to the customer and credit to the ATM GL.
- 3. The Physical (EJ/CIT): The hardware reality. The Electronic Journal (EJ) logs exactly what the machine physically did (e.g., "Dispensed 4 notes, Retracted 1").
How to Automate the 3-Way Match
Manual 3-way matching is impossible at scale because EJ logs are messy, unstructured text files. Automation is the only path forward.
Step 1: Universal Data Ingestion
Your solution must be able to ingest diverse formats. The Core might send a CSV, the Switch an ISO 8583 stream, and the ATM a raw text log. Reconwizz uses a parsing engine to normalize these disparate formats into a standard transaction record.
Step 2: Intelligent "Fuzzy" Matching
Timestamps never match perfectly. The Switch might log a transaction at 12:00:01, while the Core logs it at 12:00:03. Automated engines use "fuzzy logic" to match transactions based on a combination of Card Number (masked), Retrieval Reference Number (RRN), and approximate Time (+/- 60 seconds).
Step 3: Exception Workflow for Retracts
When the system detects a mismatch (e.g., Core says $100, EJ says $20), it shouldn't just "flag" it. It should trigger an automated workflow:
1. Auto-create a "Dispute Case."
2. Post a temporary credit to the customer (if bank policy allows).
3. Assign the case to the Cash Management team to verify with the next CIT count.
Benefits of Automation
Implementing 3-way automation transforms your operations:
- Fraud Detection: Identify "Cash Trapping" attacks where the physical dispense doesn't match the switch logic.
- Reduced CIT Costs: By knowing the exact cash position (based on verified dispenses), you can optimize replenishment schedules.
- Customer Trust: Proactively refunding partial dispenses before the customer even calls builds immense loyalty.
Conclusion: Close the Loop
In 2026, an ATM network running on 2-way matching is flying blind. By integrating the Electronic Journal into your reconciliation cycle, you close the loop between the digital instruction and the physical reality. Whether you use Reconwizz or another operational risk tool, the 3-way match is the gold standard for secure, efficient ATM management.