Definition: ATMs or Automated Teller Machines are electronic banking machines that let consumers complete basic banking transactions 24X7 with no paperwork and without the help of a bank employee.
A consumer with a debit or credit card can complete transactions with these machines. These days, many ATMs allow check deposits as well.
ATMs have made banking more convenient. A consumer can withdraw cash anytime and even on holidays without visiting a bank, as ATMs are available in different public places such as malls, hotels, offices, etc.
There are cash withdrawal limits from ATMs. These limits can range from several hundred to several thousand. However, banks can increase this limit upon request.
ATMs are known as ABMs (Automated Banking Machine) or Cash Machines in some countries.
Services Performed By ATMs
An ATM can perform the following transactions:
- Cash withdrawal
- Cash deposit
- Money transfer
- Change pin
- Update cell number
- Bill payment
- Cash transfer between accounts
- And more.
ATM Fees
Some banks allow unlimited free transactions for using their ATMs. Other banks allow a few transactions per month for free, and then the consumers have to pay a nominal fee. However, consumers must pay a nominal fee per transaction for using ATMs from different banks.
Using ATMs in a different country can cost more. The consumer has to pay for the currency conversion and a fixed fee. This fixed fee is more than what consumers pay in their country using different banks’ ATMs.
The cash withdrawal conversion rate is always higher than the online transfer conversion rate. Therefore, it is advisable to pay using a card instead of withdrawing cash to make a payment.
A Brief History of ATMs
In 1960, Japan started using a basic form of ATM where consumers were able to withdraw cash.
The first official ATM was used in London at Barclays Bank in 1967. Because of its ease of use, its popularity skyrocketed, and as of now, over 3 million ATMs are in use worldwide.
Types of ATM
ATMs are of two types:
- Basic ATM
- Advanced ATM
Basic ATMs allow cash withdrawal and other basic services such as printing short statements, PIN changes, updating mobile numbers, etc.
Advanced ATMs allow the submission of cash and other advanced services such as cash transfer between accounts, transferring amounts to different bank accounts, check deposits, cash deposits, updating account information, etc.
Elements of an ATM
An ATM has the following elements:
- Screen – This screen shows the instructions and confirmation of the transaction.
- Keypad – This pad helps you enter your request, such as PIN, cash withdrawal amount, etc.
- Camera – This records the session.
- Cash Dispenser – Cash is distributed from this slot.
- Printer – This prints the confirmation of the transaction.
- Cash Deposit Slot – Cash can be deposited through this slot.
- Check Deposit Slot – Checks can be deposited through this slot.
Summary
These days ATMs are common in every public place and help consumers complete basic transactions anytime without visiting bank branches. Banks are frequently adding new services to ATMs. Their number is constantly increasing because of ease of operation.