ICT 0417 – ATM Applications
6 ICT Applications – Automatic Teller Machine (ATM)
1. Introduction
An Automatic Teller Machine (ATM) is an electronic banking terminal that allows customers to perform a range of financial transactions without the need for a human teller. ATMs are a core ICT application in the banking sector, linking computer hardware, software, networking and security technologies.
2. Key Characteristics of ATMs
Standalone electronic device connected to the bank’s central database via a secure network.
Touch‑screen or keypad interface for user input.
Card reader that reads magnetic stripe or chip (EMV) cards.
Cash dispenser and cash receipt module.
Deposit module for cash and cheques (optional).
Printer for receipts and mini‑statements.
Security features: PIN encryption, CCTV, anti‑skimming devices.
24‑hour availability in most locations.
3. Common Uses of an ATM
Withdrawing Cash – Select amount, confirm, receive cash and receipt.
Depositing Cash or Cheques – Insert cash/cheques into the deposit slot; the machine validates and credits the account.
Checking Account Balance – Display current balance on screen and optionally print a receipt.
Mini‑Statement – Print a short list of recent transactions (usually last 5‑10).
Bill Paying – Select a biller, enter reference number and amount, confirm payment.
Money Transfers – Transfer funds between accounts within the same bank or to another bank (if supported).
4. Advantages of Using ATMs
Convenient – available 24/7, reducing the need to visit a branch.
Speed – most transactions are completed within a minute.
Reduced Queues – frees up teller staff for more complex services.
Accessibility – located in shopping centres, petrol stations, and remote areas.
Cost‑effective for banks – lower operational costs compared with staffed counters.
Enhanced security – PIN protection and limited cash exposure.
5. Disadvantages / Limitations
Limited transaction types – cannot handle complex banking services (e.g., loan applications).
Cash handling errors – occasional dispensing or deposit errors.
Technical failures – network or hardware faults can render the machine unusable.
Security risks – card skimming, shoulder surfing, and fraud if PIN is observed.
Accessibility issues for users with certain disabilities if the machine is not fully compliant with accessibility standards.
6. Summary Table
Aspect
Advantages
Disadvantages
Availability
24‑hour service, multiple locations
May be out of service due to maintenance
Speed of Transaction
Typically under 60 seconds
Network lag can cause delays
Cost
Lower operational cost for banks
Initial capital outlay for hardware
Security
PIN encryption, limited cash exposure
Risk of skimming and fraud
Functionality
Cash withdrawal, deposit, balance check, mini‑statement, bill pay, transfers
Cannot perform complex services (e.g., account opening)
7. Suggested Diagram
Suggested diagram: Flow of an ATM transaction – from card insertion, PIN entry, request processing, to cash dispensing/receipt printing.
8. Review Questions
List three security measures that are built into modern ATMs.
Explain why ATMs are considered a cost‑effective ICT application for banks.
Identify two limitations of ATMs compared with a full service bank branch.
Describe the steps a user follows to make a bill payment at an ATM.