What is 'ATM'

ATM
Standing for Automated Teller Machine, ATM has become an increasingly popular banking outlet to withdraw cash, deposit cheques and check the latest transactions and account balance.

In 1960, a man named Luther Geroge Simijan invented Bankography, a machine that allowed customers to deposit cash and check the transaction. Then the first ATM was set up in 1967 by Barclays Bank in Enfield. James Goodfellow introduced the concept of personal identification number, i.e., PIN, in 1970, marking the growth of self-service banking.

By 1984, the number of ATMs tallied at 100,000 worldwide, and its popularity surged. A large number of ATMs were built worldwide to aid digital payment services.

What is ATM?
Automated Teller Machine, i.e., ATM definition includes being electronic banking outlet which allows customers to complete basic transactions without the aid of any representative from the bank.

Convenience and accessibility are the key benefits of ATMs. Services like deposits, cash withdrawals, transfers between payments and bill payments can be performed by an ATM.

There are primarily two types of ATMs. The basic ATM allows customers to withdraw cash and receive information about updated account balances. The more advanced ATMs allow further complex services like account deposits, facilitating payments, access to account information and line of credit payments.

Did you know atm can be categorized according to the label assigned?

• Brown label: ATMs operated by a third party apart from bank or credit unions
• Green label: ATMs used for agricultural purposes
• Orange label: used for sharing transactions
• Pink label: ATMs designed specifically for females to avoid long queues and waiting times
• White label: These ATMs are introduced by TATA groups and signify particular entities and not banks own the ATMs
• Yellow label: ATMs used for e-commerce transactions

Consumers must use a plastic card, i.e., a credit card or a bank debit card, to complete a transaction. Upon authenticating through a PIN, the transaction is completed.

A typical ATM contains the following parts:-

• Card Reader: This part of the machine reads the chip placed on the front of the card or the magnetic stripe present back of the card inserted.
• Screen: The screen acts as a prompt for the user, guiding them through a service. The screen also shows information and account balance.
• Keypad: Keypad on an ATM is used by the user to enter information like personal information number (PIN) for the transaction and the amount to be involved in the transaction.
• Cash Dispenser: Cash Dispenser is a slot through which bills are dispersed and remains connected to a safe present at the bottom of the ATM.
• Printer: Users can use the printer to print receipts of transactions that have taken place.

Advanced ATMs have slots to deposit cash and paper checks.
About ATMs
On average, around USD 60 amount of cash is withdrawn per transaction. Usually, users can use their bank ATM without paying any charge. However, users might have to pay a minimum charge if they are using their bank's card in a different bank's ATM. But in most cases, users do not have to pay any extra charge and receive reimbursement if there is no other ATM in the area.

Banks and credit unions own ATMs, but individuals and business establishments can lease or buy ATMs through an ATM franchise. These individuals or business establishments usually charge fees on the machine users.

Working of ATM
Internet service providers play a crucial role in the efficient working of ATMs. It stabilizes the connection between the host processors and the atm. Once a translation is initiated, information is added by the cardholder. These are passed onto the host processors, where authorization is provided upon checking the details. Once the details are verified, host processors send an approval code for the transaction.

ATM cards are strongly secured by encryption through strong software such as Triple data encryption slandered. The automated teller machine has a very simple working principle. A simple terminal with two inputs and four output devices controls digital transaction services.

All parts of the devices are associated with an interfaced processor. If the cardholder wishes to withdraw cash, the processor redeems cash from the cardholder's account. Once the fund is transferred to the host processor's account, an approval code is dispatched, and the required cash is dispensed.

A step-by-step algorithm for operating the ATM is mentioned down below.

• Visit the ATM nearest to you and place your ATM card in the cardholder.
• Set your preferred language showcased on the screen with the help of buttons on the side of the screen
• Select the transaction you wish to perform
• Choose the account type for performing the transaction.
• Now enter your PIN through the keypad and the amount you wish to withdraw.
• Wait for a few seconds until the transaction is completed, and then you can collect your amount from the cash dispenser.
• You can collect the receipt you want and move on to any other transaction you wish to perform, or press the exit button and leave.

ATM design is a combination of hardware and software. Hardware designs include deposition and withdrawal of cash, credit card payments and entering and obtaining account information. The software controls ATM transactions.

What are the benefits of an ATM?
ATM includes features like transferring funds between banks, receiving account balances, changing a pin, depositing cash, withdrawing money and performing a range of other features. ATM makes the process of withdrawing money very hassle-free. One can perform a few services without going to the bank every time.

How to maintain an ATM?
Standard ATM parts should be cleaned, and the machine should be internally inspected to maintain working conditions. Since ATM crime-related cases are on the rise, surveillance cameras installed in the booth should also be checked.

What are some of the disadvantages associated with ATMs?
All bank services cannot be performed at a typical ATM. Machines are prone to damage, and the risk of theft and ATM pin hacks is high.

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