What is an ATM?
An automated teller machine (ATM) is an electronic device that performs the same primary banking functions as a human teller, including accepting deposits and completing withdrawals.
An automated teller machine (ATM) is an electronic device that takes the place of a human bank teller. An ATM can perform a number of basic banking procedures without direction or intervention by anyone working at the financial institution that owns the ATM. A typical modern ATM can accept deposits in both cash and check. It can withdraw money from an account. It can also transfer money from one account to another. In other words, an ATM can remove the need to interact with a human teller for routine banking procedures. An ATM is often available 24 hours a day, making them ideal for convenience as well as emergencies.
Each week, Bob used to visit his bank to cash his paycheck. He would fill out a deposit slip on which he would designate how much of the check he wanted to go into his account and how much he wanted to receive as cash. Bob would wait his turn in the busy drive-through lane then hand the teller his deposit slip. After another waiting period, Bob would finally have his money in-hand.
Then Bob started working late. When he left the office, it was after banking hours. Fortunately, Bob’s bank has an ATM that accepts deposits. Now Bob can deposit his check as well as receive cash after regular banking hours. He can use the ATM to perform the same basic banking functions that a human teller performs.
An automated teller machine (ATM) is like a giant, electronic piggy bank (just not as cute)…
By using an ATM, you can add to your bank account, or you can deduct from it. You can perform these banking procedures without anyone’s help and at a time that’s convenient for you.
An automated teller machine (ATM) is a machine substitute for a traditional human bank teller. It is capable of completing the same primary financial transactions as its human counterpart. Typical operations include cash withdrawals, check and cash deposits, money transfers, and balance checks.
Unlike human tellers, ATMs are often available 24 hours per day, even on official banking holidays. But a modern ATM is more than an electric cash machine. It’s also a specialized digital communications hub. It’s capable of relaying sensitive information back and forth between customers and their financial institutions in seconds.
The convenience and reliability of ATMs have made them a welcomed and regular part of daily life in much of the world.
People use various terms to refer to an automated teller machine (ATM). One name is the banking machine. Others include automatic teller machine, money machine, and cash machine. Sometimes people refer to an ATM by the company that owns the device if its name is displayed prominently on the machine.
There are a few necessary procedures that are common to ATMs. The main four are:
1. Verify the card and the cardholder.
The ATM reads information embedded on a plastic card that’s either an ATM card or a debit card — or sometimes a credit card. Older cards store the information on a magnetic stripe on the back, while newer cards keep the data on a computer chip that’s on the front of the card.
The ATM reads the magnetic stripe or the computer chip to determine if the card is legitimate or fake. If the card is authentic, the ATM will try to match your account with the password/PIN you entered.
2. Determine which automated operations are available to you.
After verifying your account and password, the ATM communicates with the issuer of your card. The ATM will then present you with the appropriate banking options available to you. For example, you might be able to schedule a transfer of funds between two or your accounts.
3. Inform you of your balance or other information.
One everyday use of an ATM is to learn one’s account balance.
4. Complete a financial transaction.
At this point, you can choose to deposit additional money into your account, receive cash, or transfer funds from one account to another. At some ATMs, you can also accomplish other tasks such as paying a bill.
Most ATMs have the following six parts:
Touchscreen or display screen: A touchscreen on an ATM works similarly to the one on an electronic tablet. It allows the user to choose from the options listed on the screen by touching the correct one. Older ATMs did not have this technology. They were display screens only. An ATM’s screen guides the user through each step of the process of his transaction. The instructions appear on the screen in simple, easy-to-understand sentences.
Card reader: The card reader is a device built into the ATM that reads the data stored on an ATM card, debit card, or credit card. The information is either on a magnetic stripe or a microchip.
You can conduct business at an ATM using either an ATM card or a check card, which is also called a debit card. ATM cards issued by your bank or credit union allow you to perform all the usual transactions available at ATMs.
Debit cards, which carry the logo of major credit card companies, are more functional. You can use them to do more than you can with an ATM card. For example, you can also use debit cards to make purchases online or at local businesses.
Keypad: The keypad is the set of buttons that allow you to input alphanumeric information. Using the keypad, you can identify yourself with a personal identification number (PIN). You can also choose the amount of your cash withdrawal or money transfer,
Speaker: The speaker emits distinctive sounds as you press the keys. The sounds serve as feedback verifying that the machine received your input.
Cash dispenser: The cash dispenser has an opening from which the machine presents the money that you requested.
Receipt dispenser: The receipt dispenser will present a paper record of your transaction if requested.
ATMs can store thousands of dollars in their onboard safe, filed in removable drawers according to their denomination. In other words, the $20 bills are in one location while the $5 bills are in another.
When cash is withdrawn, the ATM uses sensors to reduce the likelihood of dispensing the wrong amount of money. The sensors check the thickness of the bills to determine if two or more bills are stuck together.
If the bill is too thick, the machine will redirect it to a reject bin located inside the ATM. The same happens if the dollar is too thin. Thinness may indicate that the money is counterfeit.
ATMs are notoriously difficult to break open. Even if thieves penetrate the machine, it’s doubtful that they will get any money. Usually, there are dye packs that spray and ruin the money once the security of the ATM is compromised.
Sometimes thieves even try to steal the entire machine using a forklift or construction equipment. However, they don’t count on the ATMs having built-in GPS devices that can immediately send their coordinates to the proper authorities.
Other thieves insert their phony card reader into the ATM’s card slot. The device is known as a skimmer. It steals the information on your card’s magnetic stripe or microchip. To access your account, the thieves still need your password, so they install a camera on the ATM to see the code you enter.
It’s essential to examine the card slot at your ATM. Do not insert your card if there appears to be an add-on device attached to the card slot. Contact the authorities if such a device is present.
ATMs prevent thieves from hacking their digital communications by encrypting your PIN when it sends it over the internet to your bank for verification.
You’ll notice that your receipt shows only the last four digits of your account number. The idea is to protect customers who forget to remove their receipt from the machine. If their full account number appeared on the receipt, it would be readily available to thieves.
Keep your PIN secure by never choosing a PIN that can be easily associated with you. For example, don’t use your birthdate or house number. When you enter your PIN at the ATM, block others from seeing your entry. If no one is around, you should still shield your PIN from surveillance cameras.
Banks, convenience stores, restaurants, shopping centers, and individual entrepreneurs are just a few of the possible owners of ATMs.
Your bank may not charge a fee for using its ATM, but that’s generally not true with other ATM owners. ATM owners make money from fees. For example, there is usually a surcharge for using their ATM. The amount may differ from machine to machine because owners have the right to set their ATM fees. Sometimes, there’s also another fee for the communication between the ATM and your bank.
When exchanging money abroad, consider using an ATM. Generally, you’ll receive a better exchange rate than you will with other options. You’ll typically pay fewer fees at an ATM than you would at a bank or currency exchange bureau. However, expect to pay somewhat higher fees than you would pay at home when using another bank’s ATM.
If you have a card issued by a major credit card company, you stand an excellent chance of finding an ATM in a foreign country. Major credit cards are part of international ATM networks. Usually, you can find the name of the network on the back of the credit card. Check the network’s website or the website of your credit card company to find ATM locations in the place you’ll be visiting.
Make sure that the money that you intend to withdraw during your travels is in the primary bank account linked to your ATM card. It’s not always possible to access secondary accounts using a foreign ATM.
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