18 Advantages and Disadvantages of ATM | Benefits and Drawbacks of ATM

Introduction

Learn Advantages and Disadvantages of ATM | Benefits and Drawbacks of ATM with their uses, types, applications, importance and image in easy to understand language.

The full form of ATM is Automatic Teller Machine.
John Adrian Shepherd-Barron a British inventor was responsible for the development of ATMs he also lead the team who installed the first cash machine.

What is ATM and How it works?

ATM stands for Automatic Teller Machine. It is a device or machine you can use to withdraw as well as deposit money with the help of an ATM card.

We withdraw money from ATMs located in different places using ATM cards issued by our banks with our bank account linked to it.

ATM cards are linked to our bank account details, also the ATM card are issued by bank authorities.

In the past, we had to go to the bank to withdraw money. We had to fill out a withdraw slip and stand in line or long queue, later we used to withdraw money from our account.

Nowadays, we can withdraw cash from an ATM center, whenever we need money with the use of our ATM cards.

Nowadays, some banks offer money deposit machines to deposit money or transfer it to another person’s account using ATM cards.

ATM cards are used to make payments in online and offline transactions, such as booking movie tickets, buying transportation tickets such as buses, trains, cars, and shopping online.

The ATMs are data terminal consisting of a keyboard and monitors like some input-output devices, also it is connected to a host processor allowing it to transfer data from the host to the ATM.

To withdraw money from an ATM, an internet connection is required also it is mandatory.

Whenever we withdraw money from the ATM, we need to insert the ATM card in the machine.

It reads the card’s information, checking the complete details of the card holder such as name, account number, date of issue and expiry date of the card holder which are stored in the black magnetic strip ATM card.

Once the machine reads the data, it accepts the ATM card and is ready for further processing; then, we choose the withdraw option later the machine connects the ATM holder and their bank account for electronic fund transfer.

When the process is completed then the host approves the machine to give the cash to the ATM cardholder.  

Some banks provide money deposit machines; you deposit money to your bank account and send money to the other bank account, so you don’t need to go to the bank to deposit money.

Advantages and Disadvantages of ATM With Image

Advantages and Disadvantages of ATM
Advantages and Disadvantages of ATM

Benefits and Advantages of ATM in Points

  • Users of ATM cards can easily withdraw cash by ATMs rather going to the bank and filling the withdraw slip and standing in a queue.
  • ATM machines are open 24 hours a day, 7 days a week as well as 365 days a year we can use it anytime.
  • We can make various payments with ATM cards like online shopping, restaurants, malls and numerous places you can pay with the help of an ATM.
  • ATM is now installed at many places like airports, railway stations, hospitals, and other places that facilitate the people in withdrawing their money.
  • ATM reduces the workload of the bank employees as the customers don’t visit banks to withdraw or deposit money. The customer goes to the ATM instead of a bank.
  • ATM is installed worldwide at a convenient place, so customers do not carry cash while travelling they quickly withdraw money from ATM nearby.
  • ATM is a monitor base system, so it saves human resources, and it saves time.      
  • The customer gets exact amount of money from the ATM.
  • It is the service with minimum error.
  • With every bank account a ATM card can be availed.
  • No need of carrying cheque books and cash.
  • Online shopping made extremely easy with the use of ATM cards.
  • Can trace your account balance anytime using ATMs.
  • Fixed deposit can be done using ATMs.
  • Income tax filing can be done.
  • Insurance payment can be done with the use of ATM cards.
  • The personal loan can be applied using ATM.
  • Card to card fund transfer is possible with ATMs.

Drawbacks and Disadvantages of ATM in Points

  • Bank charges for the customers of ATM for various times using it as per the bank’s standard rate, and we have to pay charges to the bank on yearly basis.
  • Bank makes a restriction on the withdrawal on a particular limit depending on the banks standards, different banks have different taxes that have to paid by the customer.
  • Customers who make an online transaction using ATM are likely to be affected by the fraud there is a chance of stealing information by the hacker.
  • Customers who performs online deals and transactions utilizing and using ATMs are most likely to be influenced by the scams there is a possibility of swiping information by the cyberpunk.
  • Hacking is a big issue related to ATMs.
  • Majority of the time ATMs facing server down issues.
  • Some of the AMTs are cashless and not periodically refilled with cash. It makes customers to move to the next ATM.
  • No emergency fund is allotted with ATM compared to Credit cards.
  • Online fraud, cloning, forgery are happening these days.
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What are the Types of ATMs?

  • The ATM are inside the compound of the bank is called an onsite ATM.
  • The ATM machine is located outside the compound of the financial institution or banks are called offsite ATM.
  • The ATM is established by non-banking economic and financial companies as well as uses all the services are known as white label ATMs.
  • Banks do not own ATMs. Instead, they are taken on lease to supply the service to the client are called brown label Bank or financial institution
  • Orange label banks are used to share transactions.
  • Pink labels ATM are only for women.
  • Eco-friendly labels ATM are installed for the purchase connected to agriculture.

What is the Importance of ATMs?

Earlier we didn’t have ATM machines, so we intended to carry money for acquiring goods or household stuffs or to pay our bills.

Therefore cash payment was the only means to perform business and deals which were risky at times.

At times being cashless restricted our power to purchase goods.

When individuals make use of the ATM machine, which are so simple to use and avoid lugging much cash with them.

While travelling we don’t need cash these days as anything can be paid with ATM cards or cash withdraw can be done using ATMs.

Uses of ATM

ATM is used for withdrawing money, checking balance, transferring money, or changing the PIN (Personal Identification Number).

New and advanced ATMs also provide the option to withdraw a fixed deposit (FD) or apply for a loan.

You can also book tickets for railway, pay insurance, mobile recharge deposit cash, etc.

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