Automated Teller Machine

Indian Economy glossary

Also called: ATM · Topic: Payment Systems and Digital Finance · NCERT: Class 7, Ch 8 "Banks and the Magic of Finance"

Meaning

An Automated Teller Machine (ATM) is a self-service machine that works like a "mini-bank" and is open 24×7. You insert a debit card, type your PIN (a secret number code) and enter the amount to take out cash. You can also check your balance. ATMs let people get cash without visiting a branch or filling in a withdrawal slip. They are found at bus depots, markets, railway stations, airports and malls.

Some related facts:

  • Through the National Financial Switch (NFS), a customer of one bank can use another bank's ATM.
  • RBI has allowed white-label ATMs since 2012. These are ATMs owned and run by non-bank companies, and they help spread ATMs into smaller towns.
  • UPI-based cardless withdrawal is now possible. You scan a QR code on the ATM screen and approve the withdrawal in a UPI app.

Example

Meena banks with a bank in her home town. At a railway station ATM of a different bank, she inserts her debit card, enters her PIN and withdraws ₹2,000. Her account is debited at once.

Don't confuse with

  • Point of Sale (POS) machine: an ATM gives out cash. A POS machine at a shop takes a card payment for goods. It does not give cash.

Related concepts

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