Types of ATM & Their Functions
Introduction
An ATM (Automated Teller Machine) is a self-service electronic telecommunication device that allows users/customers to perform financial transactions such as, cash withdrawals, balance inquiries, and funds transfers without a human teller.
Primarily used for 24/7 banking access, they act as “mini bank branches” via debit or credit cards.
An automated teller machine is also known as an Automated Banking Machine (ABM) or Electronic Banking Device. In UK/Europe, it is also called as Cash Machine/Cash Point.
Functions of ATMs
The services generally offered at an ATM are:
- Cash Withdrawal
- Cash/Cheque Deposits
- Balance Inquiry
- Fund Transfers
- Regular Bill payments
- PIN Changes
- Mini Statements
Types of ATM & Their Functions
ATMs are mainly classified by their location, ownership model, and the specific purpose they serve.
In India, they are further distinguished by “labels” or colours that indicate their specialized functions.
Classification by Location
- On-site ATMs: Located within a bank’s branch premises, allowing customers to use both the branch and the machine.
- Off-site ATMs: Placed in high-traffic areas outside of bank buildings, such as shopping malls, airports, or railway stations. This is also done to ensure that the bank reaches out to more geographical areas and that people are able to use its services even when there is no bank branch in the area.
- Worksite ATMs: These are located within a company’s office or factory premises, typically restricted to that organization’s employees.
- Mobile ATMs: “ATMs on wheels” that move across different geographical areas to serve customers during events or in remote locations.
Classification by Ownership & Branding (Labels)
- White Label ATMs (WLA): Owned and operated by non-banking financial companies (NBFCs). To aid financial inclusion and drive ATM penetration in the country the Reserve Bank of India has permitted the launch of White Labelled ATMs (WLAs) i.e. private non-bank companies to set up, own and operate its own brand of ATMs in the country. They do not display a bank’s logo and often focus on increasing ATM density in rural areas. TATA launched the first white label ATM in India under the brand name of Indicash.
- Brown Label ATMs: These are owned and maintained by a third party, but the cash management and network connectivity are provided by a “sponsor” bank. These carry the logo of the sponsor bank.
- Yellow Label ATMs: Primary function is to facilitate e-commerce and online shopping transactions.
- Pink Label ATMs: Specifically designed for women’s safety, often located in well-lit areas with additional security features to help women avoid long general queues.
- Green Label ATMs: Dedicated to agricultural transactions, such as crop loans (KCC), subsidies, and insurance for farmers.
- Orange Label ATMs: Specialized for stock market transactions, including buying and selling shares, mutual funds, or bonds.
Classification by Functionality
- Basic Units (Cash Dispensers): Limited to basic tasks like cash withdrawals, balance inquiries, and mini statements.
- Complex Units (Full-Service): Offer advanced features like cash or check deposits, bill payments, and funds transfers.
- Biometric ATMs: As the name suggests, such machines use security features like fingerprint or iris scanners to authenticate users instead of or in addition to a PIN.
- Micro ATMs: Handheld, portable Point-of-Sale (PoS) devices used by banking correspondents to provide basic cash services in remote areas.
- Talking ATMs: Feature audio assistance for visually impaired users.
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