What is the full form of ATM?

The full form of an ATM is Automated Teller Machine. It is an electromechanical machine that comprises automated banking platforms that allow consumers to conduct smooth transactions without the intervention of a branch agent or teller. Most ATMs should allow debit or credit cardholders to withdraw cash.

ATMs are useful because they enable customers to do quick self-service operations such as cash withdrawals, deposits, bill payments, and account-to-account transfers. Fees for cash withdrawals are typically paid by the bank where the account is stored, the ATM operator, or both. Some of these fees are avoidable by utilising an ATM operated directly by the account holder’s bank.

ATMs are known as ABM (Automated Bank Machines) or Cash Machines in different parts of the world.

History of ATM

The first ATM appeared in 1967 at a Barclays Bank branch in London, while there is evidence of a cash dispenser in Japan as early as the mid-1960s. In the 1970s, an interbank transaction permitted a consumer to use one bank’s card at another bank’s ATM.

ATMs have grown around the globe in a matter of years, with a presence in every major country. They are now found in small island states like Kiribati. There are currently around 3.5 million ATMs in operation worldwide.

Various Types of ATM

There are mainly two types of ATMs:

1. Clients can only withdraw cash from basic units, which offer an updated account balance.
2. The more complex machines can also accept cash, permit credit line payments and transfers, and access account information.

Basic Parts of ATM

The ATM is simple to use. It has input and output tools that allow people to deposit and withdraw money with ease. The ATM’s key output and input devices are located beneath.

Input device

Card reader – The card reader recognises the card data recorded on the ATM card’s magnetic stripe on the back. When the card is inserted in the appropriate place, the card reader collects the account information and sends it to the server. The cash dispenser dispenses cash based on account information and orders received from the user server.

Keypad – The keypad assists the user in obtaining the requested data from the machine, such as a personal ID number, cash amount, receipt required or not required, and other information. The PIN is transferred to the server in encrypted form.

Speaker – When a button is pressed, audio input is generated via the ATM’s speaker.

Display Screen – Displays transaction information on the screen. It lists the steps of cash withdrawal in chronological order. The display could be CRT or LCD.

Receipt Printer – A receipt provides information about the transactions that are printed on it. It tells you of the transaction’s time and date, balance and withdrawal amount, and so on.

Cash Dispenser – The cash dispenser is the ATM’s primary output instrument since it distributes cash. The ATM’s very accurate sensors allow the cash dispenser to administer the proper cash quantity based on the consumer’s demands.

Working Principle of ATM

To use the ATMs, you must enter plastic ATM cards into them. On certain machines, you must drop your cards, while others demand card changing. The magnetic stripe on these ATM cards contains your account information as well as other security information. When you drop or switch your card, the computer collects account information and requests your PIN number. Machines will allow cash transactions once the authentication is validated.

Functions OF ATMs

• Deposit of cash
• Withdrawal of cash
• Transfer of cash
• Accounts details
• Mini statement
• Regular payment of the bill
• Account balance details
• Recharge of prepaid mobile
• Change the pin code

Advantages of ATM

• ATM service is available 24 ✕ 7.
• It reduces the work pressure on bank staff.
• For travellers, ATMs are more useful.
• ATM gives service without any error.