Building better ATMs: Lessons from Demonetization

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Here are few lessons l learnt about ATMs usage in the wake of demonetization of Rs. 1000 and Rs. 500 notes. These are observations based on an evening walking tour of about 15 ATMs around my house for the past three days.

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Now off to the ATMs:

A quick tip for those who wish to draw cash, check machines of lesser known banks: Federal Bank, Oriental Bank of Commerce, Vijaya Bank etc.

ATMs should display if they are functioning or not in English and the local language

I saw two people try twice, receive a printed advice and go away in disappointment. One of them thought his account did not have any. When I checked, there was a “Cash not available” sign in the opening screen. If it had been in the local language, many would not waste time trying or get the wrong idea.

ATMs should not print out a “Cannot process at this time” advice

Some ATMs did not have the above message, allowed the user to “log in” (so to speak), only to cough out a receipt with the above message? Waste of paper! Instead, they should do the above.

ATMs Should display balance before I enter the amount to be withdrawn

Many people  use the ATM to check the balance (with a printed advice) once and then use it again to withdraw. This is a serious waste of time and paper. Many ATMs can recognise the account holder name when the card is inserted. Why can’t it display balance before the amount to be withdrawn is entered? At the very least it can say, “enter an amount lower than XXX” to warn people that they do not have enough balance.

This is also true if an amount more than the machine can dispense is entered. ATMs need to be a lot more interactive than they are now.

ATMs should not print anything

Why print the receipt? Most people read it and drop it right on the floor and not in the dustbin next to the machine. Anyway, there is going to be an SMS and an entry in the account statement. That is good enough.

Photo by Scott Schiiler
ATM receipts, even delightful ones like these (not from India) are a waste or paper. Photo by Scott Schiller

ATMs are not friendly enough for the low-income group

The above observations should make it clear that ATMs are not friendly enough for the low-income segment of our population who do not have access to net banking and therefore do not have an online bank account.

The bank should educate them about receiving account balance via SMS. Even if the ATMs do not display this, at least they will save themselves a trip to the ATM when they realise that their salary has not yet been credited. But then again, sending such an SMS is a pain.

What do you think? How do you think ATM usage can be improved?

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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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  1. Your initial points while important to me are probably niceties lost on the majority.

    Subra in one of his recent comments made, in my opinion, a very important point. He said (not in the exact same words) -currently banks tolerate lower income / poor, they need to embrace. The banking system is mostly not physically accessible (or at least not as accessible as it should be in the far flung areas of this country) to the poor, and on top of that the practices are complex and hard to understand (to me). At best it is an annoyance to many of us, but at worst to the poor, it is a major hindrance. A country like ours cannot afford to lose the large millions (not that the USA can, as it found out recently). I do hope that the current is a wake up call to the banks.

    As you pointed out previously there is an urgent need for choice – to cater to the higher ranks of the society in terms of sophistication, and also to the lowest rungs in terms of more urgent needs.

    Finally, I do hope you will consider doing a piece on demonetization – is it going to provide the bang for the buck. I am yet to come across a serious opinion piece that looks into the pros and cons and the effect in the larger fight against unaccounted money.

  2. Fair points. But these are upto the Bank’s ATM department (not the ATM manufacturers) to decide on what should be displayed in a situation. and this boils down to the budget they have for software updates. I have seen some ATMs having much better user interface compared to others. some banks are OK with providing users information while some are reluctant. On “Why Print receipt” – again some ATMs ask the user if they need a receipt before printing. this could be made mandatory for all ATMs. coming on to the rural ATMs. this is a field where most ATM manufacturers/Microfinance institutions etc are doing research ( there are some based on biometric verification as well – where a shopkeeper is given cash and he can dispense to local villagers after due verification using fingerprint/retina scan) on the right model/educating people at grass roots level. given the huge base it has to cover, it would take its own time. banks charging money for SMS updates could be a dampener for low income groups who may not prefer to pay for these services.

  3. ATM s in the country realy need a makeover .

    (1) Whenever ther are more than one ATMs onteh booth some kind of physical seperationneedds to be ion place.Many time I hav e see people looking over shoulders and trying to be over helpful.We cannot be sure if they are shoulder surfing for passwords etc or they are really geunuinelyhelpful. We reaaly dont want people to be helpful because the ATM is supposed to replace a teller , so if the interface is not intuitive then we have failed in the very purpose of the ATM.

    (2) ATMS are always located in large room with a single lone or two atms and thera are always people crowding around the ATM for cataching a bit of the Air conditioning I guess.
    The booth should be small enough for a single person to enter and an auto shut door.
    Outsid ethe ATM ther should be proper place to stand up and queue away from the heat traffic etc.

    (3) ATMs should not display a large colourful Sunflower in the back ground to make the text on it unreadable. Very ridiculour i think,

    (4) The touch screens are very very poor quality. no matter ho wyou touch soft hard, they dont seems to work.Can anybodythrow light on wheter we are usinga low quality touch screen ?

    (5) Some of them are mixed model both touch screen and button on either side.
    The buttons never align with the text making it very diffiicult to undertsnd whihc button aligns with which option.

    (6) The most disasterous part is the cash dispensing slot is aligned in such a way that the cash is pushed out horizontally from the machive and if you are not a jhonty rhodes the next thing you will findi is the cash is on the floor.

    (7) Fast cash and cash withdrwal are redundant options only one shuld have made less clutter.Too many choices are confusing.

    (8) Ther are so many cases of cash not dispensed but account debited.Does anybody take any action in why the design is faulty.
    I literally gave up going wround teh branch for such a personal experience.

    Jai hind.

  4. That is why I, to the horror my near and dear ones, I prefer to go to the bank once in a couple of months at the oddest of hours (less crowd) to avoid ATM’s as much as possible. I cannot avoid the curious person looking over my shoulder, and each time I wonder why this curiosity is absent in my students, or in terms of innovation in the society… each of your points are well taken and I am glad that I am the not only one who thinks that our ATM’s are nowhere near western standards.

  5. You have a right to be alone in the ATM room. Its a standard bank policy. Or if there are multiple ATMs, only 1 person per ATM. Dont hesitate, be polite but firm, and ask any extra person loitering, or waiting his turn inside the ATM room to wait outside.

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