After reading this article you will learn about:- 1. Definition of ATM 2. Types of ATMs 3. Precautions.

Definition of ATM:

“ATM is an automated teller machine or automatic teller machine (ATM) which is an electronic computerized telecommunications device that allows a financial institution’s customers to directly use a secure method of communication to access their bank accounts, order or make cash withdrawals (or cash advances using a credit card) and check their account balances without the need for a human bank teller (or cashier of a bank). Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts, top up their mobile phones’ pre-paid accounts or even buy postage stamps.”

ATM is known by different names in different countries like Australia & Canada: Automated Banking Machine or Bank Machine.

Central Europe, Eastern Europe, Italy, and Switzerland: Bancomat New Zealand and United Kingdom: Cash Point/Cash Machine.


Who is Inventor of ATM:

No specific record is available but search archive of One call Internet, Indianan University and Werner Digital Technology the topic is not related to the inventor of ATM but of who was the “father”, or “mother” or “parent” of ATM.

According to them three names came up as an answer:

1. Jon Turner,


2. J.P. Coudreuse, and

3. Sandy Frasure,

Mr. Jon Turner at Washington University way back in early 80’s was writing papers on ATM. His students team developed an initial chip set which was actively marketed to corporations (Synoptic) for the development of small ATM Switches. The subsequent marketing splash of this and the products of other companies gave inertia to the enterprise and LAN ATM switch market. This act was proclaimed as “parent” in the press.

Mr. Jon Turner as first to be declared as Parent and not the inventor of ATM because of the fact that actual demonstration of ATM was not done by him. He can be seen as the foster father of an ATM.


Mr. J.P. Coudreuse was engaged in a Project “Prelude” of CNET where he was Technical Manager in the early 80’s and the very first practical demonstration of an ATM was done by him. Prelude was apparently first project that practically demonstrated the feasibility of service integration with cell switching, encompassing “both” networking and application aspects.

Mr. Sandy Frasure began ATM research in early 70’s . He worked on cell -based ATM like technology. He ultimately developed data kit virtual circuit switch commercially adopted in 1983 and is still in use by various organization.

Since the invention of ATM is done over course of time in different stages and by different people no one can be known as the inventor of ATM but all those who developed different technologies to produce an ATM which we are using today can well be known as parents of ATM.

Technically ATM is Asynchronous Transfer mode, a Technology of data communications and Telecommunications. The International Telecommunication Union popularly known as (1T4) issues ATM standard documents as per which ATM Technology is based on Broadband Integrated Services Digital Networks (B-ISDN).


It was originally conceived as a high speed transfer technology for voice, Video and day a over public Network. ATM other the economically bound “Bandwidth on Demand” features of packet switching Technology at the high speeds required for Today’s LAN and WAN Networks.

Types of ATMs:

There are different types of ATMs:

1. Onsite ATM:

When a Bank Installs an ATM within the premises of the Branch or at a place in the close proximity of the branch it is called onsite ATM. Onsite ATM is always helpful for the customers who frequently visit the branch. Without standing in the queue he can avail the banking services through ATM and may also perform other banking business to be done personally. On the other hand bank staff finds it easy to look after ATM and its maintenance.


2. Offsite ATM:

In order to provided maximum facilities to customers banks also decided to installed their ATM at places which are center of business, Like Malls, Railway Stations, Hospitals, Markets, Big Institutions etc. which are located far away from the Branch.

3. Bio-Metric ATM:

The illiterate persons not able to read the instructions on the screen of the ATM can use their thumb or finger prints in place of PIN number for availing banking business.


4. Mobile ATM:

A few banks have started mobile ATMs. These are placed on a specially designed vehicle and moves to different areas on specified days. All functions of a normal ATM can be done on such ATMs

5. Micro ATM:

A new Concept under consideration of the Government of India.


The Government of India has decided that each citizen of India be given a Unique Identification Number for which Unique Identification Authority of India has been constituted.

The Micro-ATM device was originally described at a high level in a vision document by UIDAI Titled “From Exclusion to Inclusion with Micro payments”. It is meant to be a device that is used by a million Business Correspondents to deliver basic banking services at the last mile. A committee consisting of IBA, UIDAI, NPCI, IDRBT, RBI and various banks was created to define the specifications and use cases of this device.

The MICRO-ATM is first step towards providing an on-line interoperable, low-cost payments platform to everyone in the country. The MICRO-ATMs are based on a bank-led model for financial inclusion, where the UID infrastructure is overlay on the existing banking infrastructure.

The basic transaction types that the MICRO ATM will support are:

1. Deposits,

2. Withdrawals,


3. Fund transfers, and

4. Balance Enquiry and mini statements.

The Objective of These Specifications are to:

1. Bring down transaction costs,

2. Ensure interoperability,

3. Ensure security and transparency of transactions,


4. Bring down the cost by being compatible with existing systems,

5. Provide a uniform customer experience, and 

6. Reduce agent training needs.

By now we have understood what is ATM, but some time ago M/S ATM Network, Inc of America and Sisco Systems Inc. invited definitions of ATM and the best Answer chosen by voters was

Precautions to be Taken by ATM Users:

Any ATM can be used by way of ATM Card, Credit Card or Debit Card. For all such cards a specific PIN (Personal Identification Number) and a Password is provided by the Bank.

The users must:


1. Keep secret his PIN number and Password. If possible it should be remembered by heart and not noted down on any document that can be easily approached by others.

2. Never hand over your card to anyone else for use.

3. If a terminal does not look genuine, never insert your card. Please ensure that no modification has been done on the terminal, no suspicious devices have been attached. Please also note that terminal is not behaving in a suspicious manner.

4. In case of withdrawing money immediately collect the money and remove the Card. In case of delay money shall go back into ATM but your account shall be debited.

5. Remember to close the transaction after every operation.

6. Do not use ATM card in presence of anyone else.


7. Do not write PIN on the ATM Card.

8. Memorize your PIN .Don’t tell anyone your PIN or Account number. Don’t write these anywhere or feed into your mobile phone or Computer.

9. In case of lost and stolen cards it must be reported without loss of time to prevent fraudulent transactions. Quick action is key of safety in such cases.

10. Never give your PIN to e-mails or over the phone. These can be hacked and cause losses for.

11. You receive several calls luring you to earn many profits from several agencies, brokers, sellers, investors on your phone. Never give your personal information on phone to any one particularly your PIN no. and account No.

12. Phishing is venerable point for everyone. Be careful never respond to an e-mail requesting you to provide Card, PIN, or personal information via the internet.


13. Treat your card as if it were cash or credit card. Protect it by not exposing the magnetic stripe to other magnetic objects, which can deactivate your card.

14. Keep record of your card issuer and their Phone numbers for reporting its lost or theft.

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