What is ATM – Definition and Uses

Understand what is ATM, how to use it, types of ATMs, and more.
What is ATM – Definition and Uses
3 mins read
9 Feb 2024

ATM stands for Automated Teller Machine, which is an electronic device that is used to conduct financial transactions. An ATM provides a convenient way for people to withdraw cash, check account balances, and even transfer money between accounts. With the widespread use of ATMs, people no longer have to visit bank branches to complete transactions. They can easily perform these operations on the go.

What is Automated Teller Machine?

An Automated Teller Machine is a type of electronic terminal equipment that is connected to a financial institution's network to facilitate banking transactions. These transactions include deposits, withdrawals, inquiry on account balances, PIN change, and many more. ATMs are among the most common and convenient ways of accessing cash, particularly for people who travel frequently. An ATM provides 24/7 access to cash and many other banking services.

Types of Automated Teller Machines (ATMs)

There are different types of ATMs that are available on the market today. Some of the most common types of ATMs include the following:

  • Basic ATMs: These ATMs allow users to withdraw cash, check their account balances, and change their PINs. Basic ATMs do not have advanced functionalities and are commonly found in low traffic areas.
  • Talking ATMs: These ATMs are specifically designed for people with visual impairments. They come equipped with audio features that guide users through transactions.
  • Full-service ATMs: These ATMs provide all the basic functionalities of a basic ATM, but they also have additional features like deposit-taking, accepting payments, and even issuing prepaid cards.
  • Smart ATMs: These ATMs come equipped with advanced features like depositing cash or checks without an envelope, currency conversion, and video assistance.

Uses of an Automated Teller Machine

ATMs are widely used for a variety of purposes. Some of the uses of an ATM include:

  • Withdrawals: One of the primary uses of ATMs is to withdraw cash. People can withdraw cash from their accounts using their ATM cards and a personal identification number (PIN). ATMs dispense cash in various denominations based on the user's request.
  • Balance Inquiry: People can check their account balances using an ATM. They can also request for a mini statement that shows their last few transactions.
  • Transfers: ATMs also allow users to transfer funds between accounts. This feature is particularly useful for people who have multiple accounts or want to send money to someone else's account.

Conclusion

In conclusion, ATMs have revolutionised the banking industry by providing a convenient way for people to conduct financial transactions. Various types of ATMs are available today, including basic ATMs, talking ATMs, full-service ATMs, and smart ATMs. These machines provide different functionalities, but they all aim at making banking convenient for users.

Disclaimer

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