Business Accounting Tutorial | ATM – Automated Teller Machine 

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ATM – Automated Teller Machine

Automated Teller Machine

Automated Teller Machine (ATM) is a data terminal used for money transactions. This powerful and convenient machine was invented by Don Wetzel a worker for the Docutel Company in Dallas, Texas in 1960s.

Benefits of ATM

• 24X7 access availability
• Privacy in transaction
• Keep accurate records of banking transactions.
• Transactions are processed quickly with an ATM card

 

Types of ATM facilities offered

 

Cash Dispenser (CD)

It is an electronic device that enables self-servicing cash dispensing with use of the card, it is the simplest form of ATM, which permits only cash withdrawal. Cash Dispenser is an ATM without a depository and only assists the customers in making cash withdrawals.

 

Online facility

Here the ATM is connected to the bank’s database and provides online real time access to the customer’s accounts. There is a daily limit to withdrawal which may differ from one bank to another. This limit is monitored by the ATM switch centre.

 

Offline facility

In this case the ATM is not connected to bank’s database. The withdrawals are permitted up to a predetermined limit only, irrespective of the balance in the customer’s accounts.

 

Networked facility

This model permits anywhere anytime banking. Since under this arrangement ATMs are connected to an ATM network referred as Networked ATM. The advantage of networked ATMs is that cardholders can use their ATM cards at any of the networked ATMs.

 

Stand-alone facility

The transactions at an ATM are restricted to customers of the ATM branch and its connected branches in this structure.

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