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What is ATM (Automated teller machine )
ATM stands for Automated teller machine and is a computerized system that enables the customer to do financial transactions easily. It is an electronic banking outlet that enables customers to perform financial transaction without the need of their bank branch representative and teller. ATMs are a convenient and safe means of managing your fund and doing financial transactions.
It enables customers to check the balance of their bank account, deposit or withdraw money, print account statements, transfer of money between your accounts etc. Use of ATM have revolutionized the whole banking process and has also simplified and reduced the workload of the banking industry. It saves the customers from visiting their bank branch personally; standing in queues there and filling up of various slips for accessing their bank accounts.
ATMs provide 24 hrs. a day and 7 days a week service to bank customers. These were first introduced and used in India in the late 1980s. ATM cards are used by customers to use and access their accounts through ATMs machines. ATM is a special type of plastic card that contains user information in a magnetic strip. This magnetic strip consists of identification code which helps in identification and authentication of user details with centralized bank computer through a modem. There are different ATM cards available in India viz. MasterCard, Maestro, Visa, Visa Electron and RuPay cards. Advantages and Disadvantages of ATM are given below:
Advantages of ATM
Provide Convenience to Customers
Customers are able to do financial transactions conveniently with the use of ATMs. They can avail various banking services and can do payments seating at their home comfort. Various payments for online shopping, at restaurants and various other places payment can be made using ATM. Nowadays ATM are installed at all important places like railway station, airports, hospitals etc. which facilitate the people in withdrawing their money whenever they want.
Offer 24×7 Service
ATMs provides 24 hours a day, 7 days a week and 365 days a year to all its customers. Unlike bank branches, it does not have any time schedule for its operations. Customers can access their bank accounts and withdraw their money at any time of day or night as per their convenience.
Reduce Banks Workload
ATMs have an efficient role in reducing the workload of the banking industry. It has relieved customers as they can avail various banking services by using ATM without visiting the bank branches. Customers are not required to stand in long queues and fill up various forms for availing basic withdrawal and deposit facilities. It helps in reducing the work pressure on bank staff and provides flexibility to its operations.
Access to Bank Account from Anywhere
Account can be accessed by customer using ATM from any part of the country or even worldwide. ATM machines are installed in different parts of the country at all convenient places. Customers don’t need to carry cash while travelling and they can easily withdraw money any place they are travelling.
Minimizes Transactions Cost
ATM has reduced the manpower need as all transactions are processed and monitored using automated computerized systems. There is less human intervention in work operations which reduce overall cost.
Disadvantages of ATM
Charges Fees
Usage of ATMs by customers invites charging various fees for using it. Bank charges routines charges as per their standard rates for providing them ATM facility. Customers are also required to pay various tax while doing transactions online using the ATM.
Limitation on Cash Withdrawal
Bank imposes restrictions on withdrawal limit of their customers using ATM. There are limitations on both no. of free transactions and the amount of money that can be withdrawn per transactions. Banks set withdrawal amount limit for their customers. Most of the banks do not allow withdrawal of more than 25,000 at a time.
Possibility of Frauds
Customers performing online transactions using ATM are likely to be affected by various frauds. There is a chance of stealing various account information by online hackers while doing online transactions. These online hackers through various suspicious activities can get access to your account and loot your money.
Non-Reachable in Rural Areas
Banks in rural areas of our country have limited computerized branches and depends mainly on manpower for its various operations. There are limited ATM machines installed in rural areas which also do not operate properly. Therefore ATM services are not properly available in rural areas.
