The term ATM is quite general in the context of finance, especially banking.
Generally, when one opens a new account with any bank, the bank issues an
ATM card which can be used to take advantage of self-banking and carry out
various financial transactions using machines (ATMs) maintained by banks in
different regions. But the first question that comes to mind is that what is
the full form of ATM?
In this article, we are discussing the essential topics about ATM, including
the ATM full form, definition, brief history, functions, components used,
etc.
What You Will Learn
What is the full form of ATM?
The meaning or full form of ATM is "Automated Teller Machine". It is one of the most useful devices in the context of banking. The automated teller machine has made banking easier for the
customers and helped them to do various financial transactions without the
need for direct interaction with the bank employees/staff.
The full form of ATM can be explained as:
| A | Automated |
| T | Teller |
| M | Machine |
Let’s talk about what exactly ATM is:
What is ATM?
By definition, "the automated teller machine (ATM) refers to an electro-mechanical
telecommunication device designed to enable customers of financial
institutions to perform or process financial transactions."
Automated teller machines are somewhat of an example of a
computer
system. In most cases, ATMs are used for cash dispensing. However, depending
on the type of ATM, several functions can be performed through an ATM. Cash
is deposited in ATMs by banks from time to time. Anyone with an ATM card,
such as a debit or credit card, and a secure PIN can withdraw cash through
an ATM.
Customers can use the ATM themselves to perform various normal banking
functions without visiting the respective bank branch. The automated teller
machine is also known as a
Cash Machine, ATM machine, Automated Banking Machine (ABM), Cash
Dispenser,
etc. Automated teller machines are used all over the world and there are
more than 3 million units of ATMs around the world.
A Brief History of ATM
The ATM was initially used by a Barclays Bank branch in Enfield London
street in June 1967. An Indian-born British inventor named
John Adrian Shepherd-Barron is
credited for his invention of the ATM. However, some sources cite records of
cash dispenser machines in Japan in the mid-1960s.
The use of ATMs by various banks spread rapidly across the globe, gaining a
foothold in almost every country. Interbank transaction systems were
introduced around the 1970s to help customers use one bank's ATM card at
another bank's ATM for financial transactions.
Functions of ATM
Depending on the type of ATM, it can be used to perform a lot of functions
along with the basic usage of cash dispensing. Modern ATMs are multi-purpose
and can be used to perform various banking services, such as:
• Cash Deposit and Withdrawal
• Fund/ Cash Transfer
• Balance and Statement Enquiry (Mini Statement)
• PIN Change
• Recharges & Bill Payments
• Mobile Number Update
• Account Details
• Pay taxes and insurance premiums
• Open/Withdraw fixed deposits
• Apply for personal loans, etc.
All the above functions may not be available in all ATMs. The functions provided by an ATM may differ from one ATM to another.
Types of ATM
The automatic teller machine is usually classified into two types:
• One with basic functions, which only permits cash withdrawal to
customers with other basic features like account balance status, PIN change,
etc.
• Another with advanced functions, which permits cash withdrawal as
well as deposits. The advanced ATMs also allow money transfers, recharges,
bill payments, and other banking features.
Components/Parts of ATM
Similar to a computer, ATM also takes inputs, processes
instructions, and gives outputs. It also uses certain specific input and
output devices to enable customers or users to deposit or withdraw money and
perform other functions. Below, the basic input and output devices of ATM
are discussed:
Input Devices of ATM
The following devices are used to communicate with the ATM to give inputs through various means or in an acceptable form:
Card Reader
The card reader recognizes the data stored on the ATM’s magnetic stripe or
chip and helps the ATM to synchronize/access the relevant user’s account. As
the user swipes or inserts the ATM card into the card reader slot, the
user’s account details are accessed and matched to the bank’s servers. Based
on further instructions by the user and successful PIN verification, the
server allows the users to withdraw cash through the ATM.
Keypad
The keypad enables users to input data requested by the ATM, such as
choosing a function to perform, entering a cash withdrawal amount, typing a
PIN or personal identification number, choosing whether a receipt is to be
printed, and other on-screen tasks. The PIN is sent to the server in an
encrypted form. Some ATMs come with touchscreen input support.
Screen Buttons
ATMs may also come with physical buttons next to the screen so that users
can select the respective actions displayed on the screen. However, nowadays
modern ATMs come with touchscreens and such ATMs do not require pressing of
the screen buttons. Instead, we can just tap on the particular action to
select it. Touchscreens used in ATMs are less sensitive than phones, and
less versatile.
Deposit Slot
Not all ATMs have a deposit slot. However, most modern ATMs are
deposit-enabled and allow users to put cash, or cheques, into their bank
accounts. The user can insert the card into the card reader, choose to make
a deposit, enter the amount, and use the deposit slot to deposit the
respective amount in cash or via cheque. However, it should be ensured by
the bank whether they support deposits or not.
Output Devices of ATM
The following devices are used to communicate with the ATM in order to obtain output in an acceptable or understandable form:
Display Screen
The display screen helps the users to interact with the ATM and understand
necessary steps or follow instructions for the related functions, such as
cash withdrawal, balance inquiry, PIN change, etc. It displays all the
information including transaction details. Screens can be
CRT,
LCD, or
LED, supporting either a touchscreen type or a normal display type.
Speaker
Speakers can be a part of most ATMs to provide audio feedback when a key is
pressed or when an action needs to be performed by the user. Specifically,
the speaker gives instructions on how to use the ATM to perform specific
functions. Speakers are mainly helpful for those who cannot see.
Cash Dispenser
A cash dispenser is one of the essential parts of an ATM as it helps the
users to take out cash from their accounts. High precision sensors are used
in ATMs to help the cash dispensers to dispense the appropriate amount of
cash as demanded by the user.
Receipt Printer
The primary function of a receipt printer is to print a small copy of the
final transaction details on paper. It can help users to view transaction
details like date and time, withdrawal amount, balance and past few
transactions, etc. Whether to take a receipt or not is decided by the
user.
How does ATM work?
• Insert the ATM card into the machine using the card input slot.
Some ATMs allow card swapping, while others hold the card until the
transaction is completed.
• Enter a secure PIN to give final authorization to access the
account.
• Choose a function to perform using the on-screen instructions and
buttons.
• If cash withdrawal is requested, take out cash from the cash
dispenser.
• If asked for a transaction receipt, take out the print receipt from
the receipt printer.
• Press Cancel (multiple times if required) until the Home screen or
default screen appears.
Some Interesting Facts about ATM
• Renowned English comedian
Reg Varney is credited with
being the
first person to use an ATM. He used the ATM when Barclays Bank inaugurated the first ATM at its
Enfield Town branch in north London.
• The
first ATM in India was
established in 1987 by HSBC (Hong Kong and Shanghai Banking Corporation) in
Mumbai.
• In countries like Brazil, people can use
ATMs with biometric authentication
by scanning their fingerprints to make transactions.
• In India, many banks allow people to transact at
ATMs using a bank application
with a secure PIN for specific transactions. People don't need to carry ATM
cards.
Other Forms of ATM
There are some other forms of the term ATM depending on the field, such as:
| Category/ Field | Full-Form |
|---|---|
| Travel | Air Traffic Management |
| Telecom | Asynchronous Transfer Mode |
| Social Media/ Chat | At The Moment |
| Defense | Anti-Tactical Missile |
| Job-Profile | Area Training Manager |
| Other (fun) | Any Time Money |
Summary
ATM (stands for Automated Teller Machine) refers to a machine that helps
users to take advantage of self-banking. It is highly accurate and is
available for use 24X7. It has reduced the workload of bank employees to the
maximum extent. Fortunately, people do not need to carry cash while traveling abroad as ATMs are available all over the world.
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