ATM: What is it and how to use it

What is an Automated Teller Machine (ATM)?

An Automated Teller Machine mostly referred to as ATM, is an electronic machine installed by banks for customers to carry out basic transactions such as withdrawals, deposits, transfers,s and bill payments without visiting a banking hall. Customers make use of a Debit or credit card which is often referred to as an ATM card to operate the machine. The machine can also be operated without a card.

ATMs are highly significant devices that aid banking transactions in over 150 countries worldwide. The device saw a breakthrough making its way to every nation at the end of the year 2000; today there are over 2000 banks globally offering services through the ATMs.

The ATM is principally operated through a debit or credit card, which is operated through the machines by bank customers seeking to undertake varying banking business. 

Using ATMs, customers can perform quick self-service transactions from deposits to cash withdrawals, bill payments, and transfers between accounts. 

Various nations have varying names for ATMs, some of which are cash machines or automated bank machines, etc.

Understanding automated teller machines (ATMs)

ATMs are electronic financial outlets that allow individuals and corporate bodies to undertake banking services without having to get into the bank’s hall. While some ATMs act as merely cash dispensers, others permit a wide range of transactions, including bill payments, cash deposits, balance transfers, and check deposits. 

In the middle to late 1960s, the first ATMs were introduced, and today there are over 2 million in use worldwide. The world’s first ATM was installed in a London branch of Barclays Bank in 1967; within a few short years, ATMs spread all over the world and were present in every major nation. 

Types of ATMs

Various nations across the world have numerous types of ATMs; for instance, some nations differentiate ATMs by the colours placed on them. 

Nonetheless, in Nigeria, the existing two major types of ATMs are simple ATMs and complex ATMs.

  1. Simple ATMs: Simple ATMs is a basic kind of ATM in the Nigerian market; the ATM offers services ranging from cash withdrawals, bill payments, and receiving report of bank details. This is the most common kind of ATM in the Nigerian market with almost all Nigerian banks having one in their possession.

    Nigeria currently possesses over 10,000 simple ATMs.
  2. Complex ATMs: The complex ATMs provide all services as seen under the simple ATMs but further provide additional services of cash deposits, customer service, and others. The complex ATMs are scarce in Nigeria, with the statistics of over 100,000 Nigerians to one complex ATM. 

Other ATMs include the Bitcoin ATM, which undertakes transactions using bitcoins as a currency. The International currency ATM offers services to users at the inter-bank settlement level with over 10 currencies to choose from. 

ATM Fees

In Nigeria, account holders can use their ATM card issuing bank’s ATMs without charges. Nonetheless, using an ATM owned by another bank attracts charges. As of December 2022, the average total fee to withdraw cash of 1000 Naira from a non-card issuing bank’s ATM is 10 Naira. 

It suffices to say that persons who intend to use non-bank ATM card issuing bank’s ATMs are likely to spend over 3000 as charges as the case may be.

Ownership of ATMs

Banks and other financial institutions commonly own ATMs. In Nigeria, only banks and other financial institutions can own ATMs, for individuals and non-banking businesses, the laws restrict their ownership of ATMs, nonetheless, these individuals can own ATMs managed and leased by a bank. 

Generally, banks own ATMs for varying reasons, among which are to make banking convenient for their customers, to reduce the crowds at banking halls, and basically to cut down on staff intake. 

What is the maximum amount that can be withdrawn from an ATM?

The sum that you can pull out from a computerized teller machine (ATM) each day, of the week, or each month will differ in light of your bank and record status at that bank. For most banking records, the sum is 20,000 Naira per time.

How to use an ATM

1. Insert your bank card

The first and most significant step to using an ATM is to insert your debit or credit card into the machine. The tip of the card with the golden chip sensor is to go in first until the entire card is in the machine.

2. Input your PIN

When getting your ATM card, a special four-digit PIN was made by yourself; that PIN is your continuous access to the use of the ATM. After inserting your card, input your PIN and gain access to your account.

3. Navigate the machine

The ATM shows various banking options offered by the machine, read carefully to know the option that suits you. Select your desired option, move to the next stages and follow the machine instructions with care.

4. Close transaction

Once you’re done with the transaction, the machine would indicate if you’d want to undertake another transaction or remove your card. Click on remove your card once done with the transaction. If you intend to go on with another transaction, click on the option for undertaking another transaction.

5. Be safe

Overall while you are at the ATM always be vigilant, making sure no one steals your information. If you are confused at any point, never ask a stranger; it is safer to call on the bank’s security to inquire about whatever clarity you may need. 

Which financial institution set up the first Nigerian ATM?

ATM was introduced into the Nigerian market for the first time in 1989, through the defunct Societe Generale Bank of Nigeria (SGBN). the SGBN sought the innovation to reach out to a wide range of customers while maintaining a few branches across the country. 

Since the start of the first ATM in 1989, all Nigerian banks and financial institutions have adopted the use of the ATM till the present day.


ATMs are a quick and easy way to have banking transactions done. The ease is drawn from the fact that the ATM is easily accessible by a wide range of customers compared to the conventional banking practice.

Can I own a private ATM?

Not really, the CBN regulations provide that only banks and their agents can operate ATM businesses in Nigeria. Nonetheless, you could partner with a bank as an agent to engage in an ATM business. 

If I am defrauded through an ATM, can I sue my bank?

Yes, your bank takes responsibility for any fraud experienced by you. Nonetheless, the bank would disclaim fraud if the customer was negligent.

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Richard Okoroafor

Richard Okoroafor

Richard is a brilliant legal content writer who doubles as a finance lawyer. He brings his wealth of legal knowledge in corporate commercial transactions to bear, offering the best value that exceeds expectations.

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