ATM Full Form (Automated Teller Machine)

What is the full form of an ATM?

The full form of an ATM is an Automated Teller Machine. ATMs are electronic devices that enable customers to access various banking services, such as withdrawing cash, depositing money, transferring funds, and checking account balances.

History of ATM

The first Automated Teller Machine (ATM) was developed by a British inventor named John Shepherd-Barron in 1967. The first machine was installed at a branch of Barclays Bank in London in 1967. This early ATM used a paper voucher system instead of plastic cards.

The first ATM to use plastic cards was developed by a group of engineers at IBM, led by Don Wetzel, in the United States in the early 1970s. The first of these machines was installed at a branch of Chemical Bank in New York City in 1974.

In the late 1970s and early 1980s, banks began to develop ATM networks that could be used by customers of multiple banks. These networks were initially regional, but by the mid-1980s, they had become national and international. Today, ATMs are an essential part of the banking system and are used by millions of people every day to perform a wide variety of transactions.

Various Types of ATM

There are various types of ATMs accessible, including the following −

• White Label ATM − ATMs run and owned by non-bank entities without an "outsourcing contract" with a particular bank.

• Green Label ATM − Agricultural Transaction ATM is available.

• Orange Label ATM − For share transactions, there is an orange label ATM available.

• Yellow Label ATM − Designed for online shopping.

• PINK Label ATMs − These ATMs are watched over by guards who make sure that only women use them. This type of ATM was created specifically to address the issue of women standing in long ATM lines.

• Biometric ATM − Biometric ATMs are those that access bank information using the customer's fingerprints and eye scans as security measures.

Basic Parts of ATM

The key parts of an ATM include −

• Card Reader − The card reader is used to read the customer's ATM card and identify their account information.

• Keypad − The customer can access their account by entering their personal identification number (PIN) on the keypad.

• Display Screen − The display screen shows instructions and prompts for the customer and displays information about their account.

• Cash Dispenser − The cash dispenser dispenses cash to the customer when they request a withdrawal.

• Deposit Slot − The deposit slot allows customers to deposit cash and checks into their account.

• Receipt Printer − The receipt printer provides a printed record of the transaction for the customer.

Working Principle of ATM

The working principle of an Automated Teller Machine (ATM) can be broken down into the following steps −

• The customer inserts their ATM card into the card reader and enters their personal identification number (PIN) on the keypad to authenticate their identity.

• The ATM reads the information on the customer's ATM card and verifies their account information with the bank's computer system over a secure network connection.

• The client decides what kind of transaction they wish to carry out, such as a cash withdrawal, a balance inquiry, or a transfer between accounts.

• The ATM processes the customer's transaction request and deducts the appropriate amount from their account, if necessary.

• If the customer has requested a cash withdrawal, the consumer receives the specified amount of money from the ATM.

• The ATM prints a receipt for the transaction, which includes details such as the amount of the transaction and the remaining balance in the customer's account.

• The ATM ejects the customer's ATM card, which the customer must retrieve before leaving the machine.

Functions of ATMs

ATMs offer a variety of functions to customers, including −

• Customers can use an ATM to withdraw cash from their account, up to the daily limit set by the bank.

• Some ATMs allow customers to deposit cash and checks into their account.

• Customers can transfer funds between accounts or to other accounts within the same bank.

• Some ATMs allow customers to pay bills or make other types of payments directly from their account.

• Customers can use an ATM to update their account information, such as changing their PIN or requesting a new card.

Advantages of ATM

ATMs offer several advantages to customers and banks, including −

• ATMs are available 24/7, allowing customers to perform transactions at any time that is convenient for them, without having to visit a bank branch.

• ATMs are located in various places, making banking services more accessible to customers, especially those living in remote areas.

• ATMs are designed to process transactions quickly, which saves time for both customers and banks.

Conclusion

In conclusion, Automated Teller Machines (ATMs) have revolutionized the way banking services are delivered to customers, offering convenience, accessibility, and security. They provide a range of functions that help customers manage their finances easily and quickly, while reducing the need for banks to maintain a large number of physical branches.

FAQs

Q1. What should I do if an ATM does not dispense cash but my account has been debited?

If an ATM does not dispense cash but your account has been debited, contact your bank immediately to report the issue and request a refund. Be sure to keep your transaction receipt as proof of the transaction.

Q2. What is the daily withdrawal limit for an ATM?

The daily withdrawal limit varies by bank and account type. It is important to check with your bank to find out what your daily withdrawal limit is.

Q3. How do I change my ATM PIN?

Most ATMs offer the option to change your PIN. Check with your bank for specific instructions on how to change your PIN.