ATMs have long revolutionized how we conduct banking transactions, providing convenience and secure access to financial services. Traditional ATMs, which are typically installed by banks, have been widely used for cash withdrawals, balance inquiries, and getting mini statements.
However, these ATM Machines are very expensive and can’t be installed on every corner because of the low density of the population. Rural areas where ATM machines are not installed due to the above reasons face difficulties in cash withdrawal.
To bridge this gap and make basic banking facilities like cash withdrawal available to everyone easily, in their locality, the government of India has introduced Micro Atm/ Mini ATM machines which are small, hand-held devices that function the same as an ATM machine.
What is a Micro ATM/ Mini ATM machine? And how does it work?
A Micro ATM machine is a hand-held tool that allows customers to withdraw cash by swiping their debit card.
How does a Micro ATM/ Mini ATM machine work?
- In order to withdraw cash through Micro ATM Machine, you need to visit the licensed Micro ATM agent.
- This Micro ATM agent will ask for your debit card and pin, just like how it works in an ATM
- Once the pin is entered correctly, the amount entered will get deducted from the customer’s account and will get credited to the Micro ATM Agent’s account along with his service commission.
- Micro ATM agent will then give the cash to his/her customer.
- This entire process takes about 4 minutes of time which is the same as of an ATM Machine.
How does a Micro ATM machine differ from a normal Micro ATM machine?
1) Accessibility and Reach: One of the primary differentiators between micro ATM machines and traditional ATMs is their accessibility and reach. Traditional ATMs are generally found in urban and semi-urban areas, predominantly near bank branches or commercial establishments. In contrast, micro ATMs are specifically designed to cater to unbanked locations, bringing banking services closer to the underbanked population. Micro ATMs can be deployed in various places such as mobile vans, local shops, or village councils, extending the reach of financial services to previously underserved communities.
2) Transaction Types and Services: Traditional ATMs offer a wide range of transaction options, including cash withdrawals, balance inquiries, funds transfers, bill payments, and more. In contrast, micro ATM machines typically focus on basic banking functions and essential services. They commonly support cash withdrawals, balance inquiries and Aadhaar-based transactions (using biometric authentication). The limited range of services offered by micro ATMs is tailored to meet the specific needs of individuals in remote areas who often require basic banking operations.
3) User Interface and Authentication: Traditional ATMs feature interactive graphical interfaces, including touch screens and keypads, providing a user-friendly experience. Authentication methods at traditional ATMs typically involve the use of debit or credit cards and PINs. Micro ATMs, on the other hand, are designed with simpler interfaces, often featuring small screens and numeric keypads. Additionally, micro ATMs support Aadhaar-based transactions, enabling biometric authentication using fingerprints or iris scans. This feature facilitates banking for individuals who may not possess a bank card or may have limited knowledge of PIN-based transactions.
4) Cost and Maintenance: Traditional ATMs are larger and more complex machines that require substantial investments for installation, maintenance, and security. Banks usually bear the costs associated with deploying and managing traditional ATMs. Micro ATMs, in contrast, are smaller, portable devices that are comparatively less expensive to set up and maintain. They are often provided by financial service providers or business correspondents (BCs), who may have partnerships with banks. This cost-effectiveness makes micro ATMs a viable option for extending banking services to remote areas with low transaction volume.
Micro ATMs have emerged as a valuable innovation in expanding financial inclusion, especially in remote and underserved areas. Their key differentiators from traditional ATMs lie in their accessibility, connectivity, transaction types, user interface, and cost-effectiveness. By leveraging simpler technology and innovative connectivity options, micro ATM machines are bridging the gap between banking services and unbanked populations, empowering individuals to access basic financial services in areas where traditional ATMs are not readily available. Micro ATM machines are the ultimate solution for last mile banking, bringing banks to the customers doorstep.
