Micro ATM Device Overview

Micro ATM Device functions similar to a handheld POS (point of sale) device. Hence, banks can be easily linked with this portable ATM device to deliver various services in even the remotest locations. One can use this device to distribute cash in rural or remote areas across the country. 

Rural bank account holders in India can use a biometric-enabled micro ATM to withdraw money from their accounts using their debit cards or via Aadhaar verification. Hence, micro ATMs can also be considered as CICO (cash in, cash out) centers. 

How Does Micro ATM Work?

Authorized agents known as business correspondents are the ones who operate micro ATMs. Any retailer or shopkeeper can be a BC. When customers withdraw funds from their bank accounts, the money actually comes from the BC's cash drawer.  

In essence, business correspondents operate as a bank for local customers. They verify the customer's legitimacy using the unique identification (UID). Customers must present identification linked to their Aadhaar Card when withdrawing funds.  

Let’s check the micro ATM’s function in detail: 

• The customer must go through a mandatory ID verification process. One must scan his/her iris or fingerprint on a biometric-enabled micro ATM, which will be validated against his/her UIDAI records. 
• Micro ATM will provide all transaction choices once verification is complete. 
• The customer must choose an option, and the smart POS equipment will complete the transaction. 
• Next, a notification would appear on the device’s screen  
• Following that, a printed receipt would be issued 
• After the transaction is completed successfully, the customer would also receive an SMS alert from the bank’s end on their mobile phone. 

Micro ATM devices can be linked to banks all around the country. This would allow a person to deposit or withdraw funds instantly, irrespective of the location, regardless of which bank a certain BC is associated with. Micro ATMs are able to work on GPRS connections. So, the barrier to entry is low even in areas with weak internet connections. 

ATM vs Micro ATM 

There are some fundamental differences between an ATM and a Micro ATM. For instance, ATMs or automated teller machines are electronic banking equipment that enables consumers to conduct financial activities, including cash deposits, withdrawals, balance inquiries, and fund transfers, among others. All of the operations conducted on an ATM machine don’t require any assistance from bank employees. To put it in a simpler way, anyone with a debit or credit card can transact using the ATM Machine by themselves, irrespective of the time of the day.  

However, unlike ATMs, an authorized agent (shopkeeper, retailer, or businessman) must be present to carry and operate a micro ATM device in remote areas. The agent technically operates as the ATM's cash disburser. Also, ATMs are situated at fixed locations and generally have cash most of the time, which might not always be the case for micro ATMs. Let’s take a look at the key differences between a traditional ATM and a micro ATM. 

Applications of Micro ATM 

As its name suggests, a micro ATM device can be used to carry out several tasks similar to an ATM. However, it also has some additional features. Besides performing banking transactions, micro ATM devices can also capture and verify biometric data and be used for eKYC purposes. Apart from these, these special devices can perform the following functions: 

• PoS (Point of Sale) terminal 
• Regular ATM transactions 
• Bank account opening  
• eKYC 
• Biometric capturing 
• Aadhaar seeding 
• Aadhaar enabled payment (AEPS) 
• Balance Enquiry 
• Cash deposit and withdrawal 
• Fund Transfer 
• Generate mini statement   

Advantages of Micro ATM 

• Here are some of the lucrative advantages of Micro ATM: 
• Micro ATMs are universally portable devices. They can work with any bank 
• The affordable price of the machine. Also, a significant reduction in operating and maintenance costs as compared to traditional ATMs 
• Micro ATMs are highly accurate when it comes to biometric identification protocols 
• Strictly compliant with UIDAI while enabling biometric transactions 
• Enable a transition to a cashless society, thereby realizing the digital Indian dream  
• Citizens have the flexibility to access their accounts whenever they want 
• Can work in areas with poor internet connectivity, thereby promoting financial inclusion in rural and semi-urban areas 

Disadvantages of Micro ATM 

Although there are no major disadvantages of a Micro ATM device, it certainly has some drawbacks. Here are some of the disadvantages of Micro ATM. 

• To complete a transaction, a Banking Correspondent (BC) is necessary. Without an authorized correspondent, the machine can’t be operated. 
• Money might not be available at all times. Also, if the business correspondent is not available, money cannot be withdrawn or claimed. 
• There are some operational risks, given that the BC might have to manually handle large volumes of cash 

Things to Consider When Buying Micro ATM Device 

If you are interested to buy micro ATMs make sure that you look for the following features: 

• The micro ATM of your choice must offer point of sale (POS) functionality, which connects to banking networks via GPRS to carry out bank-related transactions.  
• They come with a card swipe feature as well as a fingerprint or/and iris scanner for biometric authentication purposes. While all micro ATM devices have a fingerprint scanner in-built in them, most modern devices also accompany an iris scanner. 
• Micro ATMs are generally small and light enough to be carried around, making them perfect for banking outreach. However, size may vary depending on specific brands. Consider your carrying and storage capacity before investing in one. 
• Micro ATM machines must print a receipt identical to the one you would get after swiping your card in a retail store.  
• Your micro ATM should support regional languages as well for customer convenience.