What Is an ATM (Automated Teller Machine)?
An automated teller machine (ATM) is a type of electronic banking terminal that allows customers to conduct basic transactions without the assistance of a branch representative or teller. Most ATMs allow anyone with a credit or debit card to withdraw cash.
ATMs are convenient because they allow customers to perform quick self-service transactions such as deposits, cash withdrawals, bill payments, and account transfers. Fees for cash withdrawals are frequently charged by the bank where the account is held. Some can be avoided by using an ATM operated directly by the bank holding the bill. What is a banker’s cheque? Read more here.
Understanding Automated Teller Machines (ATMs)
The first ATM was installed in a Barclay’s Bank branch in London in 19671, though there are reports of a cash dispenser in Japan as early as the mid-1960s.
Interbank communications networks, which allowed customers to use one bank’s card at another bank’s ATM, were introduced later, in the 1970s.
ATMs had spread worldwide for years, with a presence in every major country. They can now be found in small island nations like Kiribati and the Federated States of Micronesia.
Types of ATMs
ATMs are classified into two types. Customers can only withdraw cash and receive account balance updates with basic units. The more sophisticated machines accept deposits, process line-of-credit payments and transfers, and access account information.
To gain access to the advanced features of the complex units, a user must frequently be a customer of the bank that operates the machine.
Analysts predict that ATMs will become even more popular, increasing ATM withdrawals. ATMs of the future will most likely be full-service terminals that replace or supplement traditional bank tellers.
Elements of ATM Design
Although each ATM has a unique design, they all have the same essential components:
- Card reader: This component reads the chip on the card’s front or the magnetic stripe on the card’s back.
- Keypad: The customer uses the keypad to enter information such as their identification number (PIN), the type of transaction required, and the transaction amount.
- Cash dispenser: Bills are dispensed through a slot in the machine, which is linked to a safe at the machine’s bottom.
- Consumers can request receipts to be printed here if necessary. The type of transaction, the amount, and the account balance are all recorded on the ticket.
- Screen: The ATM displays prompts that guide the user through the transaction process. Account information and balances, for example, are also displayed on the screen.
Slots for depositing paper checks or cash are now standard on full-service machines.
Ownership of an ATM
Banks and credit unions frequently own ATMs. On the other hand, individuals and businesses can buy or lease ATMs or through an ATM franchise when individuals or small companies, such as restaurants or gas stations, own ATMs. The profit model is based on charging users fees.
Banks also own ATMs for this purpose. They attract customers by utilising the convenience of an ATM. ATMs also relieve bank tellers of their customer service responsibilities. What is a cross cheque? Click here to know more.
