ATM: History, Types, Function and Advantages

ATM: History, Types, Function and Advantages

This article focuses on the ATM. You can also learn here the full form of ATM, History of ATM, and ATM definition. Here, I am also sharing the information about the Types of ATM, Advantages of ATM, Disadvantages of ATM. you can know about the all types of ATM in India like Bio ATM, WLA, BLA, PLA, OLA, YLA, GLA, and Mobile ATM etc.

ATM: History, Types, Function, and Advantages

What is the full form of ATM?:

The full form of ATM is the Automated teller machine or Asynchronous Transfer Mode. It is usually called Cash Machine in the UK.

Read | Internet Banking | CBS | Cheque & DD | UPI | NGO | SDR | NPA | NEFT & RTGS

ATM: History, Types, Function, and Advantages

History of ATM: Automated Teller Machine

Automated Teller Machine: It is a telecommunication device which allows customers to perform the financial transaction such as Deposits, Cash withdrawals, Balance inquiry, Fund Transfer and Recharge etc. at any time, anywhere.

The first ATM was established in 1987 in Andheri East in Mumbai, India. It was established by the HSBC Bank

What is the ATM-Automated Teller Machine?

This is an example of any time, anywhere banking.

Automated Teller Machine: Automated Teller Machine is a computerized machine that provides the customers of banks the facility of accessing their account for dispensing cash and to carry out other financial & non-financial transactions without the need to actually visit their bank branch.

Hardware Components of ATM: Automated Teller Machine

There are following components used to made up an ATM – Automated Teller Machine:

Hardware Component
Description
Display used by the customer for performing the transaction
Function key buttons usually close to the display
touchscreen used to select the various aspects of the transaction
Record printer to provide the customer with a record of the transaction
CPU to control the user interface and transaction devices
Magnetic or chip card reader to identify the customer
a PIN pad for accepting and encrypting Personal identification number
EPP4 similar in layout to a touch-tone or calculator keypad
Secure cryptoprocessor generally within a secure enclosure
Vault to store the parts of the machinery requiring restricted access
Housing for aesthetics and to attach signage
Sensors and indicators To indicate the devices
Camera To capture the video of customer

Types of ATM: Automated Teller Machine

There are two types of it:

  1. OFF Site ATM
  2. ON-Site ATM
OFF Site ATM: Automated Teller Machine

ATM on stands alone on the basis.

ON-Site ATM: Automated Teller Machine

If the ATM is attached to the branch.

The function of ATM: Automated Teller Machine

  1. Balance Inquiry
  2. Mini Statement
  3. Cash Withdraw
  4. Fund Transfer
  5. Bill Payments
  6. Online Recharge

Advantages of Bank through ATM: Automated Teller Machine

  1. Paperless Banking
  2. 24*7 services
  3. cost of operation is low
  4. Mobilization of fund
  5. Transparency
  6. Green Banking Concept
  7. Customer Rush is less

ATM: Automated Teller Machine Advantages for Customer

  1. 24*7 services
  2. Easy remittance facility transparency
  3. Mobilization of fund

Bio-metric ATM (Bio ATM)

  1. It is the latest invention to help us avoid fraud and duplication.
  2. If somebody stills our card and also know our PIN taken easily withdraw cash from our Account.
  3. In the case of Bio-metric, they cannot usually the PIN for Bio-ATM is the fingerprint of cardholders, eye-retina, and voice-record.
  4. This cannot be duplicate enhance they are very safe and secure.

White Label ATM (WLA):

  1. ATMs set up, owned and operated by non-banks are called White Label ATMs. Non-bank ATM operators are authorized under the Payment & Settlement Systems Act, 2007 by the Reserve Bank of India.
  2. WLA ATM is set up by the NBFC(Non-Banking Financial Company).
  3. Any NBFC bank with a minimum net-worth of RS. 1000 Cr. can apply for WLA.
  4. WLA does not have such a bank logo, hence it is called white label ATM.
  5. WLA does not have any sponsor bank.
  6. They have to compulsory open few ATM in Tier 3 and Tier 6 areas.
  7. RBI directly involved because these white label companies have to separately get license/ Permission from RBI to run the business.

List of Company which had established WLA: White Label ATM

  1. Tata Communications Payment Solutions Ltd.
  2. Muthoot Finance Ltd.
  3. Prizm Payment Services Pvt. Ltd.
  4. Vakrangee Ltd.
  5. AGS

Brown Label ATM:

There are following Key points of Brown Label ATM: Automated Teller Machine

  1. Brown Label ATMs are those Automated Teller machines where hardware and the lease of ATM machine are owned by the service provider, but cash management and connectivity to banking networks is provided by sponsor bank whose brand is used on the ATM.
  2. Paid up capital – 100 Cr.
  3. Indirect channel with RBI
  4. It has a logo of sponsor’s bank
  5. All off side ATM are known as Brown Label ATM.
  6. The high cost of ATM machine and RBI guideline expansion of ATM.

Green Label ATM

GLA stands for Green Label ATM. This ATM is provided for Agriculture Transaction.

Orange Label ATM

OLA stands for Orange Label ATM. This ATM is provided for a share transaction.

Yellow Label ATM

YLA stands for Yellow Label ATM. This ATM is provided for E-commerce.

Pink Label ATM

PLA stands for Pink Label ATM. This ATM is provided for women banking.

Mobile ATM

Mobile ATM is a term that refers to ATMs that run in different areas for customers. Some private banks have started ATMs on wheels which are known as Mobile ATM.

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