Automated Teller Machines (ATMs): Benefits & Drawbacks

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  • 0:04 ATMs
  • 0:26 Proprietary & Shared ATMs
  • 1:03 Benefits & Drawbacks
  • 2:12 Lesson Summary
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Lesson Transcript
Instructor: Artem Cheprasov

Artem has a doctor of veterinary medicine degree.

In this lesson, we'll learn about a machine a lot of us use every day - an ATM. We'll discuss what they are, the different kinds of ATMs, and their advantages and disadvantages for both banks and customers.


Automated teller machines, better known as ATMs, are pretty much everywhere these days. These are machines used to deposit cash or cash equivalents (like checks) and to withdraw cash.

But did you know there is more than one kind of ATM? And did you know that there are many benefits and drawbacks of using ATMs?

Proprietary & Shared ATMs

The first ATM in the United States was opened for public use in 1969 by the Philadelphia National Bank. In some cases, ATMs are proprietary ATMs, or those that are owned, operated, and serviced by a specific financial institution, commonly a bank. As such, they can only be accessed and used by a particular bank's customers. These are often located inside of a bank.


Compare this to a shared ATM, which links together a network of banks and customers. This means customers from numerous banks can use the ATM for their transactional needs.

Benefits & Drawbacks

So what are the benefits and drawbacks of ATMs? Well, some of the benefits of ATMs include:

  • The ability to access one's account 24/7 at multiple locations
  • The convenience of drive-up ATMs - you don't even have to leave your car
  • The ease of carrying a slim card as opposed to a wad of cash
  • Improved customer service, as lines in traditional banks decrease
  • Lowered costs, as fewer human tellers are needed
  • More security when compared to cash; if an ATM card is reported as stolen, the thief won't be able to withdraw any cash

Some of the drawbacks of ATMs include:

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