The ATM is a user-friendly machine which provides easy and convenient financial transaction like cash deposit and withdrawal to the people without any human error.
What is the full form of an ATM?
The complete full form of ATM is Automated Teller Machine.ATM stands for Automated Teller Machine.
ATM is a telecommunication-controlled and computer-controlled device that provides financial transfer-related services to customers, such as cash withdrawal, deposit, and money transfer or account information. It allows customers to make smooth transactions without the assistance of a branch representative or, clerk, or teller from their respective bank accounts.
ATM is a widely used option all over the world that makes life much easier for people. An ATM was first purchased in operation in 1967 at a Barclays Bank branch in North London. The actor Reg Varney inaugurated the ATM machine. Later in 1970, after discussion with other banks, one bank's card could be used in another bank's ATM for transactions. ATMs are recognized as ABMs (Automated Bank Machines) in various parts of the world.
Automatic Teller Machines (ATMs) can be of two types –
- Basic Type -
One with basic features where you can withdraw cash only. - Advance Type –
It has more advanced features where you can also deposit cash, facilitate payments and credit line transfers, and access account information.
How to use ATM?
Bank offices will provide the customer with an ATM card and a security PIN to access the card. When this ATM card is inserted into any ATM, the machine will ask for a PIN.The full form of PIN in ATM is - Personal Identification Number.
The customer must enter a PIN that must match the PIN stored in the card's chip. After entering the correct PIN, the customer gains access to his bank account and can continue the transaction.
What are the different functions of an ATM?
Here below are a list of functions for which we use ATM –- Account details
- Account balance details
- Cash deposit
- Cash withdrawal
- Cash transfer
- Mini statement
- Regular bill payment
- Change the PIN code
- Payment of invoices and mobile phone recharge, etc.
What are the benefits of ATMs?
There are many advantages of ATMs which are as follows –- ATM service is available 24 ✕ The ATM provides its customers with round-the-clock banking services, you can withdraw cash at any time, day or night.
- Basic banking services like deposits, fund transfers, etc. can be accessed by customers from everywhere including abroad. ATMs are located at every corner of the city, even at railway stations, airports, hospitals, shopping malls, etc., which is convenient.
- Reduces work pressure on bank employees.
- ATMs are more useful for travelers.
- ATM provides service without any error. Customers can get exact cash. Human error is unlikely in ATMs. An ATM is faster than withdrawing cash from a bank, there are no long queues.
- It collects money and you can check the account balance.
- No need to carry cash and you can check your account balance. ATMs are more useful for travelers as not everyone travels with cash.
- There is no need for physical paper slips for withdrawal and deposit of the money.
- Reduces work pressure on bank employees and prevents long queues at the bank.
- Saves people's and banks' precious time.
- ATMs are also useful for checking account balances. We can even check the last transactions made.
- Provides confirmation of account balance which can be used as evidence if required.
- It is a secure process where people use their own ATM cards to withdraw money.
- Anyone can use the ATM because it has many language options.
- People can change their PIN through an ATM, they don't have to rush to the bank every now and then.
- It has a security pin that only the cardholder knows, making it more secure.
- Another use of an ATM is to deposit cash from anywhere directly to the required account.
What are the disadvantages of ATMs?
There are disadvantages of the ATM which are mentioned below –- ATMs have a major disadvantage for card cloning fraud. Modern techniques are used for fraud such as ATM card cloning
- It has cash withdrawal restrictions. Only a limited amount can be used per day as each bank has set a limit for withdrawing and spending per day.
- ATMs are not available everywhere.
- Sometimes the servers are down, making it impossible to withdraw cash in an emergency.
- Not every ATM has enough cash for everyone, sometimes they run out of cash.
- There is a big security issue with ATMs. The robbers and thieves rob ATMs.
- Using ATMs charges some fees as routine charges which not everyone can afford every time, especially poor people.
- The possibility of misuse of the ATM card: if the ATM card is lost, it can be misused. Many such incidents have happened.
- People who are not educated or not technically sound cannot use ATMs because everything is written on the screen and they cannot read it. They can't use it without the help of others.
- There is a chance that there may be fraud by hackers in which there is a risk of depositing money in the account.
- Loss of personal contact with banks: Customers are losing personal contact with their bankers.
- Some banks charges fees for using the ATM so it is expensive.
- ATMs is not available in the rural areas of the country so everyone cannot access the ATM.
- People can use it if they know the ATM card PIN of others.
- ATM card updates are required from time to time. People who haven't updated their cards may have problems with ATM withdrawals.
- ATM PINs are usually 4-digit numbers, but some ATM cards have 6 digits to make them more secure, and people tend to forget their PIN, which needs to be reset before they can use it again.
What are the different parts of an ATM?
ATMs around the world are designed differently but have some basic common parts of the setup. The following are the basic parts that are used in ATMs -Display Screen
There is a screen that looks similar to a computer monitor screen. It displays transaction details. It indicates the cash withdrawal steps, one after the other in order. The screen can be CRT or LCD type.Card reader
A card reader is present in which the card needs to be inserted soon after which the display shows some options like language, transaction details, and customer ID or PIN after which the person can access their account. The card reader recognizes the card data stored on the ATM card in the magnetic strip that is located on the back. The account details are collected by the card reader and sent to the server when the card is inserted into the designated slot. Cash Dispensing allows cash to be dispensed based on account information and commands received from the user's server.Keypad or Keyboard
There is a keyboard where the customer has to enter the information the machine requires for the transaction to go through. The keyboard helps the user with the required data from the machine such as personal identification number, cash amount, receipt needed or not needed, and other information. The PIN is sent to the server in encrypted form.Speaker
A speaker is used in the ATM to generate audio when a button is pressed. It also gives audio instructions regarding machine access and other financial transaction.Receipt Printer
There is a receipt printer that prints out a transaction detail sheet. A receipt displays information about the transactions printed on it. It informs you about the time and date of transaction, balance and amount of withdrawal, etc.Cash Dispenser
A cash dispenser is the basic exit tool of an ATM that dispenses cash. The high-precision sensors provided in the ATM enable the ATM to manage the appropriate amount of cash according to the consumer's needs. Cash is safely and securely deposited into the machine by bank clerks for the customer transaction.
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