An automated mechanical machine used for financial transactions, typically the withdrawal of funds from a personal bank account, is known as an ATM. The use of these electronic machines to withdraw or deposit funds into accounts necessitates no human interaction. A basic ATM can only be used to withdraw cash from a bank account, whereas an advanced ATM can also deposit money in addition to allowing for cash withdrawals.
ATM Full Form
The term “Automated Teller Machine” refers to a sophisticated electronic device that facilitates seamless financial transactions and improves the efficiency of banking procedures. An individual can use an ATM to make transactions or withdraw cash without the assistance of a bank representative. Customers who use a debit or credit card can now conveniently withdraw cash at any time thanks to this electronic banking location. Although the idea of ATMs is not new, there is a lot you need to know about them in order to comprehend their significance and their operation.
What is an ATM?
You can independently access your bank account and make financial transactions using an ATM. If you have a credit card or a debit card, you can use the ATM. You can use the machine to access a variety of banking services by inserting your card into the machine’s card slot and entering your Personal Identification Number (PIN).
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Types of Automated Teller Machines
There are various types of ATMs based on their functionality and location.
- Basic Units: These straightforward units enable you to obtain account statements, inquire about the balance, and withdraw funds.
- Complex Units: These include features like bill payment, lines of credit, and cash or check deposits.
- On-site ATMs: These are ATMs that are inside the bank.
- Off-site ATM: These are ATMs outside of the bank’s premises in various locations.
Classification of ATM’s on Purpose as Follows
- White-label: White-label ATMs are those owned and operated by financial institutions that are not banks.
- Green label: These ATMs simplify agricultural transactions like crop loans, subsidies, insurance, and more, primarily in rural areas.
- Brown label: The ATM hardware system is owned by a third party. The machines are leased from banks.
- Orange label: These are share market transactions ATMs.
- Yellow label: These ATMs are used to pay bills and conduct e-commerce transactions like online shopping.
- Pink label: Women patrons can feel safer using these ATMs.
Benefits of ATM – Automated Teller Machine
The following are the advantages of ATMs:
- ATM services are available 24×7.
- The availability of ATMs has made bank employees’ lives easier.
- When a person needs to make a transaction, they can use an ATM instead of going to the bank.
- Because users do not need to share sensitive information with others, ATMs make transactions safe and secure.
What are the ATM’s Used For?
Cardholders can use ATMs for a variety of purposes. A few uses for ATMs are outlined below.
- Cash Withdrawals: The ability to withdraw cash is the most common use of ATMs.
- Balance Enquiry: Account holders can check their balances at an ATM.
- Deposits: Users can deposit cash or checks at very few ATMs using the deposits feature.
- Fund Transfer: Users of ATMs can use this feature to move money between their bank accounts.
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Importance of ATM Machine
Automated teller machines (ATMs) are crucial to making banking services more user-friendly and accessible.
- Daily financial transactions like cash withdrawals, checking account balances, and more are made easier with ATMs. ATMs provide advanced banking services.
- For instance, using an ATM, you can quickly and easily transfer money from your savings account to your current account.
- Opening a fixed deposit, paying bills, applying for a loan, and other new features have all been made possible by technological advancement.
How Does an ATM Work?
Cash withdrawal is an ATM’s most basic function. The following are the steps to take to get cash out of an ATM:
- Inset Debit or Credit Card: When you locate an ATM, look for a slot
- Select Your Preference Language: After inserting your credit card, the machine will prompt you to select your preferred language.
- Enter your PIN: Enter your PIN to perform transactions.
- Choose a Transaction Type: After entering your PIN, you can choose to withdraw cash or inquire about your balance.
- Choose a Type of Bank Account: Choose between savings and current accounts based on your account type.
- Enter the Required Amount: Enter the amount you want to take out of your account.
- Collect Cash: The cash will be dispensed after confirmation, and you can collect it.
History & Significance
The Automated Teller Machine was first introduced in London by Barclays Bank in the late 1960s. This machine was designed to provide banking services to customers after banking hours, despite its many flaws. The design and security of ATMs have greatly improved as a result of technological advancements and the introduction of features like PIN. The demand for ATMs increased toward the end of the 1980s. Banking became more convenient for customers as an increasing number of people began using ATMs. Money could be deposited, money could be withdrawn, account balances could be checked, and many other banking services could be used. ATMs have developed numerous new options and features over time.
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Final Words
The term “Automated Teller Machine” is a self-operating electronic device that allows for immediate cash withdrawals up to various bank-set maximum limits and operates in self-operating mode. Every city has more than 10,000 ATMs, and smaller villages and cities have between 500 and 1,000 ATMs that are open 24 hours a day, seven days a week. The fact that you can withdraw money from an ATM regardless of whether you have a current bank account in that particular branch is the best feature of ATMs. It helps with things like deposit transfer, checking the balance, and updating passbooks, among other things. It is also known as a cash machine.