ATM — Definition Explained Simply | Examples & Role
ATM — is an electronic device that allows bank customers to withdraw or deposit cash, pay for services, and perform other banking operations using a payment card without the need for a teller.
ATM (Automated Teller Machine) is a self-service banking device that enables customers to carry out basic financial transactions using a bank card. Through an ATM, users can withdraw or deposit cash, check their account balance, pay bills, and transfer funds between accounts.
ATMs are connected to banking networks and international payment systems (Visa, Mastercard, etc.), which allows their use both domestically and abroad. When withdrawing or paying in a foreign currency, the ATM automatically performs currency conversion at the exchange rate set by the bank.
Main functions of an ATM
- Cash withdrawal.
- Cash deposit to a bank card or account.
- Balance inquiry.
- Payment for services (mobile, utilities, internet, etc.).
- Transfers between cards and accounts.
Types of ATMs
- Cash-dispensing ATMs — designed for cash withdrawals and balance checks only.
- Deposit ATMs — allow customers to deposit cash to their accounts.
- Multifunctional ATMs — support bill payments, transfers, and other operations.
Using ATMs abroad
When using an ATM abroad, the machine may offer Dynamic Currency Conversion (DCC), allowing the cardholder to choose between the local currency and the card currency. It is usually more cost-effective to choose the local currency to avoid extra conversion fees. Some banks may also charge international withdrawal fees.
Examples
- A customer withdraws €100 from a Deutsche Bank ATM.
- A traveler in Poland withdraws zloty from a euro card using DCC.
- In Russia, a client deposits cash via a Sberbank ATM.