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Essay on ATM Machine | ATM Machine Essay for Students and Children in English
February 14, 2024 by Sastry
Essay On ATM Machine: An evolutionary trend from cash economy to cheque economy and now to plastic card economy is witnessed in the introduction of Automated Teller Machines (ATMs). An automated teller machine is an electronic telecommunication device that enables the customers of a financial institution to perform financial transaction without the physical need for a human cashier, clerk or even the customer in its premises.
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Long and Short Essays on ATM Machine for Kids and Students in English
Given below are two essays in English for students and children about the topic of ‘ATM Machine’ in both long and short form. The first essay is a long essay on ATM Machine of 400-500 words. This long essay about ATM Machine is suitable for students of class 7, 8, 9 and 10, and also for competitive exam aspirants. The second essay is a short essay on ATM Machine of 150-200 words. These are suitable for students and children in class 6 and below.
Long Essay on ATM Machine 500 Words in English
Below we have given a long essay on ATM Machine of 500 words is helpful for classes 7, 8, 9 and 10 and Competitive Exam Aspirants. This long essay on the topic is suitable for students of class 7 to class 10, and also for competitive exam aspirants.
With more and more people using banks today, the business of banking is basically about efficient and convenient service delivery. ATM has become an important issue, not only in retaining consumers, but also as a competitive advantage while boosting the overall profitability. ATMs have gained prominence as a delivery channel for banking transactions in India.
Banks have been deploying ATMs to increase their reach, ATM provides banking services for 24 hours. For this reason some people also call it ‘All Time Money’ Machine. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe with a chip that contains a unique card number.
The card usually have the name of the holder, its type and other information. Authentication is provided by the customer by entering a Personal Identification Number (PIN). Then the customer can avail its various services like cash withdrawal, checking balance etc. ATM or Cash points was first introduced in 1961 by the City Bank of New York on a trial basis. It allowed banks to provide their consumers with a convenient way, round the clock, to carry out varying transactions. However it was not appreciated much at that time and was removed after a period of 6 months.
After various modifications it was re-introduced in various countries and saw an extensive usage. With regard to India, HSBC Bank was the first bank in India to offer ATM facility in 1987. Presently, almost all the banks are offering ATM facility adequately in cities as well as in rural areas. ATMs have revolutionised the banking industry. It would not be wrong to say that outwardly Automated Teller Machine appears like a human weighing machine. Huge usage and user-friendliness makes the comparison even more prominent. But ATM’s have alternate purpose to serve. Today’s ATMs are placed not only near or inside the banks, but in locations such as shopping malls, airports, metros, railway station, petrol station, grocery stores or any other place frequented by a large number of people. ATM also provide the best possible exchange rates for foreign travellers and are widely used for this purpose.
If the currency being withdrawn from the ATM is different from that in which the bank account is denominated, then the money will be converted at an official exchange rate. ATMs eliminate the need for the customers to travel to the branch at which his/her accounts are maintained if the machines are conveniently located and networked. For this reason, the number of customers visiting the bank has reduced tremendously. This in turn has resulted in huge savings in the employee-related costs for the banks.
Short Essay on ATM Machine 200 Words in English
Below we have given a short essay on ATM Machine is for Classes 1, 2, 3, 4, 5, and 6. This short essay on the topic is suitable for students of class 6 and below.
The cost incurred in servicing a customer through the ATM is one-third of the cost incurred otherwise. As the transactions are handled through softwares, scope for human error or misappropriation is reduced. With all these benefits, banks all over the world are making huge profits.
Like other modern technologies, ATMs too usually come along with some limiting , factors. Kids are seen misusing the hard-earned money of their parents often withdrawing more money than needed. Banks levy some extra charges while using the machjnes of other banks of which customers are totally oblivious. CCTV cameras installed at various ATMs can become a medium to collect passwords (PIN) of the users. Robbers are guaranteed sure cash from the consumers visiting the money machines. Very recently a newspaper report reported about a robber forcing an innocent person to withdraw more cash at the gunpoint. Moreover, ATM often do not have adequate funds leaving the client with no alternative during non-banking hours. Damaged machine is another problem.
Despite the problems, it is universally agreed that the benefits derived from the ATMs cannot be ignored. Infact latest development are being tried to transform it further. Latest in news is India’s first ‘talking’ Automated Teller Machine for visually impaired in Ahmedabad. More such renewing would be done to place it deeper in the busy lives of people.
ATM Machine Essay Word Meanings for Simple Understanding
- Evolutionary – the process of developing
- Automated – made automatic, done by machine
- Teller – a bank clerk who receives and pays out money
- Retaining – to maintain possession of, to keep in one’s service
- Prominence – fame, importance, notability
- Deploying – set up, to bring into action, to arrange
- Avail – utilise
- Authentication – validating the correctness
- Frequented – to visit often
- Denominated – to denote, to issue or express in terms of a given monetary unit
- Tremendously – extremely, hugely
- Misappropriation – theft, embezzlement, stealing
- Levy – to impose or collect
- Oblivious – unaware, ignorant, careless
- Renewing – reviving
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What Is an Automated Teller Machine (ATM)?
History of atms, types of atms, how to use an atm, using atms outside the u.s..
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What Is an ATM and How Does It Work?
Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
Amanda Bellucco-Chatham is an editor, writer, and fact-checker with years of experience researching personal finance topics. Specialties include general financial planning, career development, lending, retirement, tax preparation, and credit.
An automated teller machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller. Anyone with a credit card or debit card can access cash at most ATMs, either in the U.S. or other countries.
ATMs are convenient, allowing consumers to perform quick self-service transactions such as deposits, cash withdrawals, bill payments , and transfers between accounts.
Fees 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 fees can be avoided by using an ATM operated directly by the bank network that holds the account. Using an ATM abroad can cost more than using one in the U.S. due to exchange rates or transaction fees.
Key Takeaways
- ATMS, or automated teller machines, are banking outlets where you can withdraw cash without going into a branch of their bank.
- Some ATMs only dispense cash, while others allow transactions such as check deposits or balance transfers.
- The first ATMs appeared in 1960s and now number more than 2 million worldwide.
- Today’s ATMs are capable of accepting deposits as well as administering several other banking services.
- To avoid ATM fees, try to use an ATM by your own bank.
The first ATM appeared at a branch of Barclays 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 allowed a consumer to use one bank’s card at another bank’s ATM followed in the 1970s.
Within a few years, ATMs had spread around 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 States of Micronesia.
ATMs are also known automated bank machines (ABMs), cashpoints, or cash machines.
More than 4 million
Number of ATMs in use around the world.
There are two main types of ATMs. Basic units only allow you to withdraw cash and receive updated account balances.
The more complex machines accept deposits, facilitate line of credit payments and transfers, and access account information. To access the advanced features of the complex units, you often must be an accountholder at the bank that operates the machine.
You can now buy and sell Bitcoin and other crypto tokens via Bitcoin ATMs , Bitcoin ATMsare internet-connected terminals that will dispense cash in return for crypto. They may also accept cash or credit card to purchase crypto. There are now more than 28,000 Bitcoin ATMs located around the world.
ATM Design Elements
The design of each ATM may be different, but they all contain the same basic parts:
- Card reader : This part reads the chip on the front of your card or the magnetic stripe on the back.
- Keypad : The keypad is used to input information, including your personal identification number (PIN) , the type of transaction required, and the amount of the transaction.
- Cash dispenser : Bills are dispensed through a slot in the machine, which is connected to a safe at the bottom of the machine.
- Printer : If required, you can request receipts that are printed out of the ATM. The receipt records the type of transaction, the amount, and the current account balance.
- Screen : The ATM issues prompts that guide you through the process of executing the transaction. Information about accounts and their balances is also transmitted on the screen.
Full-service machines often have slots for depositing paper checks or cash.
To use an ATM, you typically insert your bank cards and follow the prompts to withdraw cash, which is dispensed through a slot. ATMs require you to use a plastic card—either a bank debit card or a credit card—to complete a transaction. Your identity is authenticated by a PIN before any transaction can be made.
Many cards come with a chip, which transmits data from the card to the machine. These work in the same way as a bar code that is scanned by a code reader.
Banks place ATMs inside and outside of their branches. Other ATMs are located in high-traffic areas such as shopping centers, grocery stores, convenience stores, airports, bus and railway stations, gas stations, casinos, restaurants, and other locations.
Most ATMs in banks are multifunctional, while off-site ATMs are generally only for cash withdrawals.
Account holders can typically use their bank’s ATMs at no charge, but an ATM owned by another bank usually charges a fee. According to MoneyRates.com, the average total fees to withdraw cash from an out-of-network ATM was $4.55 in 2022. Some banks will reimburse their customers for the fee, especially if there is no corresponding ATM available in the area.
ATM fees can add up for users who make withdrawals regularly. For example, if you make weekly withdrawals at an ATM that charges $4 and is not from your bank, you would pay more than $200 a year in ATM fees.
ATMs make it easier for you to access your checking or savings accounts from almost anywhere in the world when you travel.
Travel experts recommend using foreign ATMs as a source of cash abroad, as they generally receive a more favorable exchange rate than they would at most currency exchange offices.
However, the accountholder’s bank may charge a transaction fee or a percentage of the amount exchanged. Many ATMs don't list the exchange rate on the receipt, making it difficult to track spending.
How Much Can You Withdraw from an Automated Teller Machine (ATM)?
The amount that you can withdraw from an automated teller machine (ATM) per day, per week, or per month will vary based on your bank and account status at that bank. For instance, some banks limit daily cash withdrawals to $300. But most Citibank accounts allow up to $1,500, depending on your account. You may be able to get around these limits by calling your bank to request permission or upgrading your banking status by depositing more funds.
How Do You Make a Deposit at an ATM?
If you are a bank’s customer, you may be able to deposit cash or checks via one of their ATMs. To do this, you may simply need to insert the checks or cash directly into the machine. Other machines may require you to fill out a deposit slip and put the money into an envelope before inserting it into the machine. Be sure to endorse the back of any checks and note “For Deposit Only” to be safer.
Which Bank Installed the First ATM in the U.S.?
The first ATM in the U.S. was installed by Chemical Bank in Rockville Center (Long Island), New York, in 1969 (two years after Barclays installed the first ATM in the U.K.). By the end of 1971, more than 1,000 ATMs were installed worldwide.
ATM, or automated teller machine, is a machine that lets you get cash from your bank account without visiting a teller. Some ATMs are simple cash dispensers, while others allow a variety of transactions such as check deposits, balance transfers, and bill payments. Before you make a withdrawal, make sure you understand what fees you will have to pay.
Wise. " Using ATMs Abroad: How To Avoid Unfair Exchange Rates and Hidden Fees ."
Barclays. “ From the Archives: The ATM Is 50 .”
The Atlantic. “ A Brief History of the ATM .”
The World Bank, World Bank Open Data. “ Automated Teller Machines (ATMs) (Per 100,000 Adults) .”
ATM Marketplace. “ 50 Little-Known Facts About ATMs .”
BankBazaar. " ATM Machine ."
Coin ATM Radar. “ Bitcoin ATM Installations Growth (United States) .”
Chase. " Can You Deposit Cash at an ATM ?"
Navy Federal Credit Union. " Forget the Fees: Don't Pay Extra for Your ATM Transactions ."
Citibank. " Compare Benefits: Options to Fit Your Needs ."
NCR. “ A History of ATM Innovation .”
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Cash Withdrawal, Deposit, and Bank Transfer Security Essay
The use case of withdrawal, the use case of deposit, the use case of bank transfer, ethical issues with atm use case.
The use case is depicting the associated activities related to the money withdrawal of a bank client from an ATM. Before withdrawing money from an ATM, certain conditions must be fulfilled; and the conditions are: the customer has an ATM card with him, the network connection of bank system is active, the ATM must contain a withdrawable amount of cash, and the ATM has an option for withdrawing money. When a person goes to an ATM booth to withdraw cash, the following events are most likely to happen.
First, the customer has to insert his/her bank card into the card reader of the ATM. Once the customer’s bank card is in the system, it distributes a session code as a reference for forthcoming uses for identifying system errors (if there are any), the code is synchronized with the bank system. The system reads the card information and then matches it with the pre-stored information in the system. Once the match is found, the system authenticates the customer by displaying a set of service options to the customer.
When the service options are available, the customer has to select the option “withdraw cash”. As the cash withdrawal button is pressed by the customer, the system displays a number of standard withdrawal amounts along with an option to input a customized amount. Then the customer selects an amount to withdraw and requests withdrawal pressing the confirmation button. Upon receipt of the withdrawal confirmation, the system matches the available cash with the requested amount, if the system finds sufficient cash to dispense, it starts performing the withdrawal.
The system discharges the customer’s card, and when the customer collects the bank card, the system then hands out the requested amount of cash to the customer. After that, the system distributes a receipt to the customer and creates a transaction log entry of the withdrawal. Under some specific situations, the above-mentioned use case might not work as stated, sometimes there could be a failure of the system. [See chart 1].
One of the alternate processes can be initiated in the customer authentication process. When the customer authentication process starts, the system validates the card information by communicating with the bank system through the internal network connection. Sometimes, the ATM fails to get connected with the bank server, and the system fails to substantiate the customer, and it ends the withdrawal request. Also, the system might fail to authenticate the customer due to an inactive bank card and an inactive account. In case of a stolen card, incorrect PIN, and invalid card information, the ATM confiscates the card and captures a ten seconds video of the person.
After that, the system informs the customer that the card has been confiscated, and he or she should contact their bank regarding this situation. The system creates an event log entry to keep the customer’s information and the captured images, and then resume to the basic flow. Functional failure of the ATM machine, apart from the fact the customer did not have enough funds in his/her account, or the ATM did not have enough cash to dispense, can end the withdrawal request.
The deposit use case is slightly different from the withdrawal case, but some of the steps are essentially the same in the process. The customer must put the money that will be deposited into an envelope and write down the account name and amount on the envelope for later verification by the cashier. The process of deposit starts when the customer is identified with the basic process by inserting the basic required information the ATM, and the ATM displays different options to the customer, and the customer selects the deposit option.
The ATM asks for the account number and the amount that will be deposited into the account, and the customer has to fill the forms with the requested information. As soon as the information is entered, the ATM will request the customer to put all the money into an envelope and insert it into the “insert box”, once the customer inserts the envelope, the ATM prints a transaction ID on the envelope. The ATM system prints the deposit receipts and returns the bank card to the customer [See chart 2].
The deposit case could end with some alternative flow which is described here in the paper. When the customer inserts the money without an envelope, the ATM will print the transaction details on the first bill or note and rest of the note or bills will not be counted which is not a good thing at all, there must be a solution to the issue. Two or more envelopes would also create a similar problem like the first one, only one envelope would be counted and rest of the envelopes will not be counted which is an issue.
If no envelope is inserted at all then after a minute the basic case ends, and return to the beginning of the flow. When the inserted card information does not match with the account number that the customer has inserted, the bank consortium indicates it to the ATM system, and it shows an error message “wrong account information”. The customer has to start at the step where he/she had to enter the account details. The deposit system may fail if the connection to the cashier is lost and the use case ends.
The system of ATM reads the card information and validates it. Then the ATM requires the PIN code from the customer when the customer enters the PIN code the system verifies it by communicating with the bank system. The next step starts when the ATM displays the available service options on the screen, and the customer selects “Fund Transfer” from the menu. The ATM then asks the customer to input the account number from which the fund will be transferred, which is followed by an input request of the account number to which the fund should be transferred, and finally, it asks the customer to input the amount that he/she is intended to transfer.
The bank customer enters all the requested information and confirms the transfer. As soon as the ATM receives the transfer instruction it sends a request to the bank consortium with the card ID, pin, amount, and account details; the consortium verifies the transaction and approves the transfer request. The ATM ejects the bank card and resends it back to the customer, it also prints a receipt of the fund transferring details. The use case ends here [See chart 3].
The fund transfer case can be failed through the alternative process in which the bank consortium fails to approve the transfer request due to insufficient funds, invalid bank card information, invalid PIN code, invalid account information, and the customer cancellation. The alternative process can also be initiated for technical errors among which card stuck in the card reader, power cut, network problem between ATM and bank consortium, and in the case of robbery. When alternative process initiated it eventually ends the process, and begin the flow again.
The development of ATM machine system is literally a critical issue and most importantly it deals with the financial assets of people. Due to the complexity of the system, some ethical issues should come into the consideration. The implication of use case can be seen only for ATM development which articulates how the customers or external users can use the system to withdraw, deposit, and transfer fund. Kamalrudin, Grundy, and Hosking (2010) asserted that the use case is a medium for assessing the requirement for creating a better system that makes sure the users and the customers are going through a dialogue with a transaction.
The use case has a good number of pitfalls and some of these pitfalls include some ethical issues as well. One of the biggest ethical issues is the security system. Although the system verifies the cardholder information still it cannot detect if the ATM user is the actual bank customer or not. Which implies someone else who knows the PIN and has access to the card of a bank can easily withdraw money from ATM.
Rajaraman (2011) mentioned in his book that many studies had found ATM as the source of stealing money from bank customers. Oko and Oruh (2012) mentioned about some fraudulent activities that are happening now a day; they mentioned ATM card theft, skimming, pin theft, card reader techniques, pin pad techniques, and force withdrawal are the most common security threat. It can be said that; these threats must be taken into consideration while using use cases for designing the ATM system development.
Kamalrudin, M., Grundy, J., & Hosking, J. (2010). Tool support for essential use cases to better capture software requirements . In Proceedings of the IEEE/ACM international conference on Automated software engineering (pp. 255-264). Antwerp, Belgium: ACM. Web.
Oko, S., & Oruh, J. (2012). Enhanced ATM security system using biometrics . International Journal of Computer Science Issues , 9 (5), 355-363. Web.
Rajaraman, V. (2011). Analysis and design of information systems . New Delhi, India: PHI Learning Pvt. Ltd.
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IvyPanda. (2020, August 31). Cash Withdrawal, Deposit, and Bank Transfer Security. https://ivypanda.com/essays/cash-withdrawal-deposit-and-bank-transfer-security/
"Cash Withdrawal, Deposit, and Bank Transfer Security." IvyPanda , 31 Aug. 2020, ivypanda.com/essays/cash-withdrawal-deposit-and-bank-transfer-security/.
IvyPanda . (2020) 'Cash Withdrawal, Deposit, and Bank Transfer Security'. 31 August.
IvyPanda . 2020. "Cash Withdrawal, Deposit, and Bank Transfer Security." August 31, 2020. https://ivypanda.com/essays/cash-withdrawal-deposit-and-bank-transfer-security/.
1. IvyPanda . "Cash Withdrawal, Deposit, and Bank Transfer Security." August 31, 2020. https://ivypanda.com/essays/cash-withdrawal-deposit-and-bank-transfer-security/.
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IvyPanda . "Cash Withdrawal, Deposit, and Bank Transfer Security." August 31, 2020. https://ivypanda.com/essays/cash-withdrawal-deposit-and-bank-transfer-security/.
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Sept. 2, 1969: First U.S. ATM Starts Doling Out Dollars
The machine, called the Docuteller, was installed in a wall of the Chemical Bank in Rockville Centre, New York. It marked the first time reusable, magnetically coded cards were used to withdraw cash.
A bank advertisement announcing the event touted, “On Sept. 2, our bank will open at 9:00 and never close again!"
Don Wetzel, an executive at Docutel, a Dallas company that developed automated baggage-handling equipment, is generally credited as coming up with the idea for the modern ATM while standing in a bank line. Previous automated bank machines had allowed customers to make deposits, pay bills or obtain automated cash -- after purchasing a one-time voucher or card from a teller. The new device was the first in the United States to dispense cash using a mag-stripe card that didn’t require teller intervention.
For the time being, tellers had no need to fear for their jobs. At about $30,000 each ($178,000 in today's buying power), the machines cost more than a teller’s annual salary.
And they could only dispense cash, not receive deposits or transfer money between accounts. Those features came with the 1971 version, called the Total Teller.
The ATM freed customers from the tyranny of banker’s hours, giving them access to dough 24/7 and even, much later, performing the function of currency converters -- allowing Americans traveling abroad to obtain cash in local currencies.
Of course, the machines were good for banks, too, eventually letting them cut costs, reduce teller lines and, of course, charge outrageous user fees.
There were issues, though. Because the machines were offline there was no way to check a customer’s balance to see if there was enough money to cover a withdrawal.
“Not only was it a technical problem to overcome, it was a problem in the minds of the banker to issue a card to somebody and not know whether he had the money in his account or not,” Wetzel said in a 1995 interview .
To overcome that barrier, there was a $150 daily limit for ATM withdrawals. Other obstacles included finding a manufacturer to put mag stripes on the back of the bank cards, and printing receipts that could be read by machine.
Then there were problems with resistance from banks, who worried that customers would reject the machines, or that reducing face-to-face interaction with customers would lose opportunities to sell customers other bank services.
Customers embraced the new machines, however, which opened the way for other manufacturers to get in the game.
Diebold was one of the first companies to see the gold in the emerging ATM market. A maker of safes and vaults until then, the company decided to branch out in 1974 with the first installation of its TABS 500 ATM. By 1995, Diebold was producing more than half of all ATMs in the United States.
Today there are ATMs everywhere, including one at the McMurdo research station on Antarctica –- but no sign of one, just yet, on the moon. And today’s ATMs go far beyond teller duty. Some even sell lottery tickets and postage stamps.
But along with the ubiquity of the machines came security issues.
The first ATMs were offline mechanical machines. Within a decade, with the rise of PCs, they became electronic devices. By the 1990s, ATMs were being connected to backend networks by modem, and their dominant operating system was Microsoft Windows. This, of course, opened a whole new wave of vulnerabilities.
Since then, hackers and scammers have kept banks on their toes devising ever-more-sophisticated ways to steal cash through ATMs. Skimmers, until recently, were the dominant mode. The devices consist of components slipped over legitimate card readers that surreptitiously record data from the mag strip of cards as customers insert them. A tiny camera captures the customer’s PIN as it’s entered on the keypad.
There have also been a spate of attacks using a default passcode that the maker of one ATM brand inexplicably printed in an operator’s manual easily found online.
Recently, however, hackers have found new ways to strip ATMs of their cash by installing malware on the machines. Last year, malicious software was discovered on 20 bank ATMs in Russia and Ukraine. The program was designed to attack ATMs made by Diebold and NCR that run Microsoft Windows XP software.
The attack requires someone to physically load the malware on to the machine -- with a USB stick or cable, for example. Once this is done, attackers can insert a control card into the machine’s card reader to trigger the malware and give them control of the machine through a custom interface and the ATM’s keypad.
A thief could instruct the machine to eject whatever cash was inside the machine. A fully loaded bank ATM can hold up to $600,000. The malware also captures account numbers and PINs from the machine’s transaction application and then delivers them to the thief on a receipt printed from the machine in an encrypted format, or uploaded to a storage device inserted in the card reader.
This year at the Black Hat security conference in Las Vegas, researcher Barnaby Jack took the hack one step further by discovering a way to “jackpot” ATMs by installing malware remotely over modem on one brand of ATM, using a vulnerability he found in the system.
Source: Various
Photo: An unidentified girl puts her computer punch card into the slot of an ATM money machine, outside a bank in central London in 1968. Associated Press
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Automated teller machine (ATM): What it is and how to use one
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Table of contents
What is an ATM?
Examples of atm transactions, what to watch out for with atms.
An automated teller machine (ATM) is a specialized computer that allows you to complete bank transactions without the need of a bank representative. Many ATMs are conveniently accessible any time of day or night and can be used for everything from withdrawing or depositing money to checking your account balance to transferring money between accounts.
Here we’ll delve deeper into what an ATM is, common transactions performed at ATMs and important things to know before using them.
Key takeaways
- An ATM is a machine that allows you to withdraw money, deposit cash or checks, view your balance or transfer money between accounts.
- Many ATMs are accessible around the clock and eliminate the need to see a bank teller for transactions.
- It pays to avoid ATM fees by only using ATMs in your bank’s network.
ATMs are machines that dispense cash and allow you to make other banking transactions. An ATM typically consists of a screen, a card reader, a keypad, a cash dispenser and a printer.
ATMs can be found in many locations throughout the U.S. and the world. On-premise ATMs are located at financial institutions such as banks and credit unions , while off-premise ones are commonly offered at places like airports, grocery stores and gas stations.
Using an ATM simply involves inserting your bank-issued ATM card, entering your personal identification number (PIN) and following the prompts on the screen to complete your desired transaction.
ATMs debuted to the public in the 1960s, and Barclays lays claim to unveiling the world’s first ATM at a branch in London in 1967. The first ATM in the U.S. started dispensing cash in 1969 to customers of Chemical Bank in New York. By the end of 2022, more than 450,000 ATMs were operating in the country, according to data from research firm Euromonitor International.
Various common banking transactions that are often carried out at an ATM include:
Withdrawing cash
The most common ATM transaction is the withdrawal of funds from one’s account. Banks typically impose limits on the maximum amount that can be taken out each day. This amount can vary from bank to bank, as well as among different accounts offered by a single bank.
Depositing money
Account holders can often use an ATM to deposit cash or checks. When making this type of transaction, you’ll be asked to insert the funds into a slot in the machine. When money is deposited in the form of a check, the bank sometimes might not provide you with access to the funds until the check has cleared.
Transferring funds
You may be able to use an ATM to transfer money between accounts you hold with your bank. For instance, if you wish to transfer $200 from your savings account to your checking account, this can often be done by selecting the “transfer” option at the ATM. Like balance inquiries, transferring funds between accounts is also something you can accomplish using your bank’s mobile app or website.
Balance inquiries
You can also visit an ATM to view your current account balance. This feature may come in handy if you wish to know how much you’re able to spend when using your debit card or writing a check . Alternatively, your account balance is something you can view by logging onto your bank’s mobile app or website. Knowing your balance can help you keep from overspending or overdrawing your account .
Some banks also allow customers to use ATMs to see a small list of their recent transactions (although viewing your entire account statement isn’t usually an option).
Using an ATM that’s not owned by your bank, or one that’s not in your bank’s network, may result in fees imposed by both your bank and the bank that owns the ATM. The combined average fee is currently at a record high of $4.73, according to Bankrate’s 2023 checking account and ATM fee study .
Ways to avoid ATM fees include only using ATMs in your bank’s network and requesting cash back when you make purchases at a grocery store or other retailer.
ATM withdrawal limits
As we’ve mentioned, banks impose limits on the amount of funds you can withdraw at an ATM each day. This can help curb fraud in the event someone has possession of your ATM card and knows your PIN. What’s more, limiting the amount per withdrawal allows the bank to manage cash movement, since each ATM only holds a limited amount of money.
Location and safety
Ways to avoid becoming a victim of crime when using an ATM include using machines that are located in well-lit public places. Use your hand or body as a shield when entering your PIN to prevent others from seeing you type it. Once you receive your cash, instead of counting it at the ATM, wait until you’re in a more private location — such as your car — to do so.
Bottom line
ATMs often conveniently provide access to cash on a 24/7 basis, without the need to see a teller or other bank representative. They also commonly offer the ability to deposit funds, check your balance and transfer money between accounts. ATMs make your cash more accessible and are quick and easy to use, once you’re aware of things like withdrawal limits and ways to avoid paying out-of-network fees.
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A Brief History of the ATM
How automation changed retail banking, an Object Lesson
Eyes glaze over when I mention my interest in researching automated teller machines. Yet after I explain why I think they're relevant, many people can easily recall personal anecdotes in which an ATM plays a central role: a chance encounter with a long-lost friend while waiting in a queue, or the fear of being robbed in an unfamiliar location, or the feeling of seeing an insufficient funds notice displayed on the screen.
Most urbanites have interacted with the ubiquitous "cashpoint." Paul Volcker, of the U.S. Federal Reserve fame, even considered it the "only useful innovation in banking." Cashpoints appear frequently on TV and in printed news because, for most consumers, they're one of the few points of contact with today's otherwise-ephemeral financial services.
In spite of their cultural significance, ATMs recede into the noise of everyday memory. Few stop to reflect on how they—and the computer infrastructure that supports them—became the backbone of contemporary retail payments.
The cash dispenser was born almost 50 years ago, in 1967. For many, this was the first tangible evidence that retail banking was changing; the introduction of the ATM marked the dawn of contemporary digital banking. Several lay claim to the invention of the cashpoint, including John Shepherd-Barron and James Goodfellow in the U.K.; Don Wetzel and Luther Simjian in the U.S.; and even engineering companies like De La Rue, Speytec-Burroughs, Asea-Metior, and Omron Tateisi. But the ATM is a complex technology. There was no single eureka moment that marked its arrival.
The ATM finds its origins in the 1950s and 1960s, when self-service gas stations, supermarkets, automated public-transportation ticketing, and candy dispensers were popularized. The first cash machine seems to have been deployed in Japan in the mid-1960s, according to a Pacific Stars and Stripes account at the time, but little has been published about it since. The most successful early deployments took place in Europe, where bankers responded to increasing unionization and rising labor costs by soliciting engineers to develop a solution for after-hours cash distribution. This resulted in three independent efforts, each of which entered use in 1967 : the Bankomat in Sweden, and the Barclaycash and Chubb MD2 in the U.K.
Cashpoints materialized thanks to a long chain of innovations. Some were of a general nature, such as steel, video-display units, plastic, magnetic tape, or (more recently) the Windows operating system. Others were purpose-made, such as the cash output mechanism and, in the 1960s, the previously non-existent algorithm that associated an encrypted PIN with a customer account. These components were developed through active collaboration between groups of bankers and engineers, each of which attempted to solve different aspects of the complex challenges inherent in the development of the ATM.
Never before had electronic equipment been so exposed to the elements. The necessity of human intervention in early systems invited further automation. For instance, they could easily jam or run out of product. They could erroneously dispense several bank notes instead of just one—all without the owner's knowledge. They were activated by plastic or paper tokens that would only activate for the operating bank and, in some cases, only that particular bank location. Some banks would keep the token in the machine and return it to the customer (by post) once the account had been debited. As a result, early ATMs were standalone, clunky, unfriendly, and inflexible. They could do one thing: dispense cash when activated by a token.
Given these constraints, it's not surprising that it took more than a decade for banks to deploy cashpoints beyond a handful of experiments. In its early days, few believed that the cashpoint would make a difference to the average consumer. In context, this prediction might have seemed sure; cashpoints appeared before credit or debit cards were a popular alternative to bills and coins, at a moment in time when most of the world's citizens worked in a cash economy. With the exception of the U.S. and France, even personal checks were largely limited to the wealthy.
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Updating central records from the point of a transaction is easy in today's world of mobile banking and e-commerce, but the cashpoint was one of the first devices to use real-time networking. Early in the ATM's development, creating a way to communicate with a central computer (and therefore inform customers of their account balances) became an overriding design concern. In cooperation with IBM, Swedish savings banks began testing a networked cashpoint in 1968. A collaboration between IBM and Lloyd's Bank followed, and that bank deployed several networked devices in the United Kingdom in 1973. But widespread online authorization still had a long way to go. Throughout the 1970s, IBM engineers developed the rails, pipes, and standards on which other elements of the payments ecosystem (such as credit cards and point-of-sale terminals) would eventually depend.
The ATM freed the average consumer from lengthy queues for services that had previously been limited to bank hours. As devices spread, this convenience steadily changed patterns of consumption, enabling unplanned weekend shopping and impromptu dining. At the same time, it allowed retail banks to grow their customer base by granting access to consumers who'd previously been excluded from using a current account or a credit card. The nature of work in bank branches also changed as employees relocated away from teller services and into sales. High-margin services and products like car insurance, credit cards, investment funds, and mortgages owe a debt to the outsourcing of ordinary banking to ATMs. But when such sales opportunities failed to materialize, banks also began to cut costs by reducing branch staff and closing down branches. This process continues even today, with so-called "branch transformation" remaining a hot topic in the industry .
Bank regulators across the world have actively shaped ATM technology by dictating who can own and operate them, monitoring the cost of withdrawals as well as where they can be physically located. But the average person has also influenced ATMs: the way they look, the way they work, and their role as a platform for today's plethora of balance inquiries, deposits, transfers, and (in some European countries) airtime top ups for pay-by-minute cellphones.
In 1971, a handful of years after the first machines appeared in England and Sweden, manufacturers were operating in Britain (Speytec-Burroughs), the U.S. (Docutel and Diebold), and Japan (Omrom Tateisi). Together, they deployed cash machines in their home countries and across Europe, Canada, Israel, Cyprus, and Latin America. However, by the early 1980s, pioneers such as Chubb, De La Rue, Docutel, and Asea-Metior had left the industry as each failed to keep up with developments in computing and electronics. Other manufacturers, such as Burroughs, hadn't achieved their deployment targets. Citibank abandoned plans to commercialize its proprietary CAT-1 and CAT-2 devices and, instead, continued to use them in its global, proprietary network until the 1990s.
Not so with IBM, which had the marketing muscle, engineering expertise, and business contacts to dominate the market. The company seemed poised to overwhelm its competitors until executives decided to deploy a new model—the IBM 4732 family—which were incompatible with previous models, including the already-successful and widely deployed IBM 3624. Many banks evaluated the machine and refused to buy it because, in a stroke, IBM had made the banks' significant capital investments in the older computer infrastructure obsolete. This obsolescence extended beyond the physical devices inside bank branches to the machines and software that supported communication across the bank's network, and even to standards for shared cashpoint networks. IBM's move soured banks, inadvertently, opening the ATM market to new cashpoint manufacturers. Eventually, IBM abandoned payment-technology systems entirely.
Around this time, two Ohio-based companies, NCR and Diebold, were working on technology that would enable them to dominate the supply of cashpoints for the next two decades. As a result of the IBM 4732 fiasco, NCR built its business on software that emulated the IBM 3624. Meanwhile, IBM and Diebold formed a joint venture in 1984, called InterBold. Its aim was to unite Diebold's self-service technology with IBM's global distribution system. Seven years later, and in spite of growing sales, the joint venture ended: Diebold hadn't achieved the international market breakthrough it'd hoped for and IBM's returns fell short of its expectations, in part due to the growth in local processing architectures, which had invalidated IBM's strategy to link ATMs to its expensive mainframes.
NCR and Diebold were instrumental in turning the cash-dispenser dinosaur into today's sleek, multi-function ATM. The companies' innovations included customer-friendly video display units, programmable buttons alongside the screen, a shift toward dispensing cash horizontally (which reduced jams), and expanded functionality, including money transfers and balance inquiries.
But NCR and Diebold were not alone. Growth in the number of banks deploying ATMs across the world promoted an increase in the number of manufacturers: Honeywell in the U.S.; Phillips, Olivetti, and Siemens-Nixdorf (today, Wincor) in Europe; and Fujitsu, GRG, Hyosung, and Hitachi in Asia. Large European banks also developed proprietary networks, numbering in the thousands of ATMs, which U.S. banks favored shared networks (and their subsequent interconnection fees).
Despite innovations in modular manufacturing, speedier ways to identify delinquent accounts, and the associated reduction in service costs, however, ATMs remained a significant capital investment. The use of dedicated telephone lines limited them to bank branches or high volume non-bank locations, such as busy train stations and big airports. This limitation finally lifted with the advent of digital telephony and the industry's adoption of the Windows operating system. These two seemingly simple modifications transformed the ATM, enabling remote diagnostics and integration with credit card clearance networks. They also enabled the advent of the Independent ATM Deployer (IAD)—ATM vendors unaffiliated with a major financial institution —and renewed growth in the machine's deployment in the late 1990s.
Still, not everything is rosy for the ATM industry. In a cost-reduction move in 2014, for instance, Chilean banks reduced the size of their ATM fleets (as well as the frequency of cash resupplies for existing machines) while encouraging the use of government-sponsored cash remittance networks in mom-and-pop retail stores. This move led to public outcry and anti-bank campaigns on social media. The success of mobile banking in Africa has also created doubt about the need to deploy ATMs in developing countries. Mobile banking and remittances—which alleviate the need for cash and bank branches in rural areas—offer the chance to increase financial inclusion in Africa, Asia, and Latin America while obviating the substantial investment required to install and maintain proprietary ATM networks. Despite these advantages, the fate of mobile banking and remittances, for many developing countries, remains uncertain .
From its humble and uncertain beginning nearly 50 years ago, the ATM has become pervasive. But it wasn't until the 1980s, more than 15 years after the machine's invention, that the ATM's success was assured. Today, we're asked for our PINs in libraries, on the Internet, and in every sort of retail store, for which debit cards have become the de facto currency. The near-total global integration of ATM networks means that we can travel almost anywhere in the world with just a piece of plastic in our pocket, confident that we'll have access to cash in places as far afield as Hong Kong, Easter Island, Giza, Paris, and even Antarctica. Some machines now act as Internet kiosks, while others display an advertising by third parties or allow users to purchase minutes for their mobile phones. Yet for all its digital innovations, the quick dispensing of physical cash remains the core, transformative function of the ATM.
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The first essay is a long essay on ATM Machine of 400-500 words. This long essay about ATM Machine is suitable for students of class 7, 8, 9 and 10, and also for competitive exam aspirants. The second essay is a short essay on ATM Machine of 150-200 words. These are suitable for students and children in class 6 and below.
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