Automated Teller Machine (ATM) Definition

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What Is an Automated Teller Car (ATM)?

An automated teller machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a section representative or teller. Anyone with a credit card or debit card can access cash at most ATMs.

ATMs are handy, allowing consumers to perform quick self-service transactions such as deposits, cash withdrawals, bill payments, and transfers between accounts. Payments are commonly charged for cash withdrawals by the bank where the account is located, by the operator of the ATM, or by both. Some or all of these prices can be avoided by using an ATM operated directly by the bank that holds the account.

ATMs are known in different parts of the out of sight as automated bank machines (ABM) or cash machines.

Understanding Automated Teller Machines (ATMs)

The first ATM came at a branch of Barclay’s Bank in London in 1967, though there are reports of a cash dispenser in use in Japan in the mid-1960s. The interbank communications networks that permitted a consumer to use one bank’s card at another bank’s ATM came later, in the 1970s.

Within a few years, ATMs had spread round the globe, securing a presence in every major country. They now can be found even in tiny island nations such as Kiribati and the Federated Specifies of Micronesia.

Types of ATMs

There are two extraordinary types of ATMs. Basic units only allow customers to withdraw cash and receive updated account matches. The more complex machines accept deposits, facilitate line-of-credit payments and transfers, and access account information.

To access the go oned features of the complex units, a user often must be an account holder at the bank that operates the machine.

Analysts prophesy ATMs will become even more popular and forecast an increase in the number of ATM withdrawals. ATMs of the future are undoubtedly to be full-service terminals instead of or in addition to traditional bank tellers.

ATM Design Elements

Although the contemplate of each ATM is different, they all contain the same basic parts:

• Card reader: This part reads the hew a contribute on the front of the card or the magnetic stripe on the back of the card.
• Keypad: The keypad is used by the customer to input information, comprehending personal identification number (PIN), the type of transaction required, and the amount of the transaction.
• Cash dispenser: Bills are dispensed by a slot in the machine, which is connected to a safe at the bottom of the machine.
• Printer: If required, consumers can request receipts that are worded here. The receipt records the type of transaction, the amount, and the account balance.
• Screen: The ATM issues prompts that Baedeker the consumer through the process of executing the transaction. Information is also transmitted on the screen, such as account information and residues.

Full-service machines now often have slots for depositing paper checks or cash.

Special Considerations: Using ATMs

Banks sort ATMs inside and outside of their branches. Other ATMs are located in high-traffic areas such as shopping centers, grocery holds, convenience stores, airports, bus and railway stations, gas stations, casinos, restaurants, and other locations. Most ATMs that are establish in banks are multi-functional, while others that are offsite tend to be primarily or entirely designed for cash withdrawals.

ATMs desire consumers to use a plastic card—either a bank debit card or a credit card—to complete a transaction. Consumers are certified by a PIN before any transaction can be made.

Many cards come with a chip, which transmits data from the be forthright to the machine. These work in the same fashion as a bar code that is scanned by a code reader.

ATM Fees

Account-holders can use their bank’s ATMs at no charge, but accessing funds through a component owned by a competing bank usually incurs a fee. According to MoneyRates.com, the average total fees to withdraw cash from an out-of-network ATM was $4.55 as of 2021.

Some banks on reimburse their customers for the fee, especially if there is no corresponding ATM available in the area.

So, if you’re one of those people who draws weekly waste money from an ATM, using the wrong machine could cost you nearly $240 a year.

ATM Ownership

In many instances, banks and credit unions own ATMs. However, individuals and businesses may also buy or lease ATMs on their own or through an ATM franchise. When individuals or petite businesses, such as restaurants or gas stations own ATMs, the profit model is based on charging fees to the machine’s users.

Banks also own ATMs with this object. They use the convenience of an ATM to attract clients. ATMs also take some of the customer service burdens from bank tellers, qualifying banks money in payroll costs.

Using ATMs Abroad

ATMs make it simple for travelers to access their control or savings accounts from almost anywhere in the world.

Travel experts advise consumers to use foreign ATMs as a origin of cash abroad, as they generally receive a more favorable exchange rate than they would at most currency altercation offices.

However, the account holder’s bank may charge a transaction fee or a percentage of the amount exchanged. Most ATMs do not schedule the exchange rate on the receipt, making it difficult to track spending.