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About ATM Cards

The modern ATM card eliminates the need to personally visit the bank for cash and other services.If you have a bank account, you can simply search ‘ATM near me’ to locate your nearest ATM and conveniently withdraw cash, set the PIN, change the PIN, and do so much more. You can also use the card for both online and offline purchases.

How Does the ATM Card Work

When you insert your ATM card in the slot to withdraw money at an ATM or use it at a retail outlet, it requests you to type in your Personal Identification Number (PIN). It then sends a communication to the bank’s servers to validate the ATM PIN against the one registered to your account. Once the authenticity is established, the machine dispenses the cash/debits the amount and transmits the notice that the transaction is complete. The process is the same in the case of online transactions too, except that there is no need to present the physical card or type the PIN. As long as the details such as card number, expiry date, and CVV are entered correctly, the correct one-time password (OTP) sent to your registered number or 3D secure password should help you successfully complete the transaction.

ATM Charges of Top Banks in India

Banks do not charge you for issuing an ATM card; however, there is a limit to the number of free transactions you can avail on the card. For most top banks, like ICICI Bank, Axis Bank, YES Bank, RBL Bank, etc., you get 5 free transactions in a month at the respective bank’s ATM, 3 free transactions per month (in metros), and 5 free transactions per month (in non-metros) at other bank ATMs. If you use the card after exhausting the free limit on the card, you are required to pay a charge. This charge varies with the transaction type: financial transaction (cash withdrawal) and non-financial transaction (balance enquiry, mini-statement, and PIN change). For the above-mentioned banks, you have to pay ₹20 + GST for financial transactions and ₹8.50 + GST for non-financial transactions.

Features and Benefits of Using an ATM Card

There are several benefits of using an ATM card to transact. Here are a few:

  • There is no need to carry cash as you can easily pay digitally using the card

  • You can use the card to pay your bills online and offline

  • By swiping the card at the ATM, you can easily access your bank account details such as balance, mini statement, etc.

  • The card is protected using a four-digit PIN which ensures that your money is secure and only you can access it

  • You can avail attractive discounts and offers using your ATM card

Why are ATM Cards Important

ATM cards allow you to easily withdraw cash from an ATM. You can also use the card to digitally pay for your purchases at both online portals and retail outlets. Against select expenses, you also get the option to earn reward points and enjoy special offers. They are backed by advanced security features which keep your hard-earned money safe. This is over and above the four-digit security PIN you need to validate all transactions. It’s also easy to report and block your card in case of theft or loss.

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FAQs on ATM Card

✔️What does the abbreviation ATM stand for?

The abbreviation ATM stands for Automated Teller Machine.

 

✔️How does an ATM work?

When you insert your debit or credit card in the ATM slot to withdraw money, the machine requests you to type in your PIN. The information entered is communicated using a safe network to the bank’s computers, which then matches the PIN entered to the one registered against your account. Once authenticated, the machine dispenses the cash. It also transmits a notice confirming that the transaction is complete.

✔️What is the difference between an ATM card, debit card, and credit card?

ATM cards and debit cards are mostly similar in their way of operation, i.e., they deduct the money from your savings account. However, in the case of a credit card, you borrow funds on the card for your transactions which you are required to pay once the credit card statement is generated at the end of a billing cycle.