The Impact, Advantages of Using Automated Teller Machine (ATM) in Nigeria Banking Industry

The business of banking is basically about efficient service delivery. Consequently, the introduction of facilities that enhance the delivery of banking services in a cost-effective manner is always a welcome development. This is what information technology (IT) is all about. As competition in the market place increase, and several modes of delivery for banking products and services,automated teller machine (ATM) has become an important issue, not only in retaining customers but also gaining a competitive advantage while maintaining and growing overall profitability. The introduction and implementation of new technologies in the Nigerian economy has always been known to come along various degrees of difficulties. Hence the introduction of the (ATM) in the banking sector of the economy could not have been an entirely different situation.
ATM like other technologies usually comes along with some limiting factors and individual problems. Despite these problems, it is universally agreed that the benefits derived from electronic payment cannot be over emphasized. Numerous studies have shown that electronic payment brings many benefits to users- convenience, security, record-keeping, low cost etc. Nigeria is largely a cash based economy with over 90% of funds residing outside the banking sector as against the developed world where the money in circulation is 4% and 9% in the UK and US respectively. The cash based economy is characterized by the psychology to physically hold and touch cash: a culture informed by ignorance, illiteracy and lack of security consciousness and appreciation of merits digital payment.
Consequently, the study of the factors affecting the successful adoption of this technology coupled with the technological, contextual and implementation process is very necessary in order to achieve optimum use of the opportunities presented by this innovation. This seminar therefore discusses the prospects of combating the challenges of ATM in our Nigerian Banks.
In Nigeria, Automated Teller Machine technology is becoming more common than it ever was. ATMs appear to be mainly provided by banks in Nigeria (Fasan, 2007). Yet, their widespread adoption by customers of banks is not clear, as it appears that peoples’ perception of the technology is diverse, which in turn affects their decision to actually use ATMs or not. ATMs are set up to provide 24 hour services to bank customers, who cannot expect to be able to transact with banks in the same period of time (Ugwu, 2008). Nevertheless, it is observed that banks still have many customers transacting with tellers within their doors, and queues are still not a thing of the past inside banks. It is consequently, important to discover why this is so, because as a technology, ATMs are supposed to make life easier and more efficient for the customers of banks.
The purpose of this research is to highlight the impacts, advantages of using Automated Teller Machine in our banking industry than in the use manual system of queuing in line to be served.
The main aim of this research is to highlight the issues that make people have phobia for this innovation and to show the advantages that abound in the use of this technology.
The exercise sought to provide insights into;
• The awareness of ATM
• Reasons for using ATM
• Level of usage
• Problems associated with usage
• Service demand for ATMs in terms of functions and features
The study is centered around the challenges and the issues that make people to be wary of the use of ATM. It covers the level of usage of ATM by the Nigerian Populace and the problems they encounter.

The Emergence of Automated Teller Machine (ATM)
ATM or Cash points, first introduced in 1961 by City Bank of New York on a trial basis, allowed financial institutions provide their customers with a convenient way, round the clock, to carry out varying transactions which included withdrawal of funds, made deposits, check account balance, and later on included features to allow customers pay bills, etc. There was no need for a cashier to be present or for a customer to physically visit the financial institutions premises to carry out such transactions. (Amel, D. F., 1986).
ATM technology allows customers carry out the above-mentioned transactions using an ATM card, which could be a debit or a credit card. An ATM machine authenticates the card by reading and verifying the magnetic strip, card number, expiration date, and an already provided or pre-selected PIN number. Like with most technological advances, there is always a flaw which criminal-minded individuals identify and exploit to perpetuate fraud. Technology is being constantly evolved so that ATM transactions can be an enjoyable experience to its customers, especially if one has to pay for goods or services in cash by 1.00am in the morning and has no money. (Batiz-Lazo, B., & Barrie, A. 2005)

The Nigerian Experience
In Nigeria, the ATM was introduced in 1989 by the defunct Societe Generale Bank. Since then, ATMs appear to have spread their tentacles across Nigeria. The banking industry no doubt has witnessed advancement in technology just like any other sector; the use of the automated teller machine is one of these as it affects banking operations entirely. With the adoption of Self Service technology by the banks, ATMs have continued to service the populace; they offer convenience to customers and provide banking services well beyond the traditional service period. It therefore encourages a cashless society. Thus, eliminating the risk of loss of cash through theft or fire as witnessed in the past, creating a win-win scenario for parties concerned. (Karahanna, et al, 1999)
At inception, the few banks that had these machines restricted customers to accessing the machines from their banks alone. This cannot be said today, as technology solutions have been made available to the banks to enable users make withdrawals from ATMs of other banks. However, the usage of ATM in Nigeria is just advancing beyond withdrawals, checking of account balance and purchase of airtime, despite the craving for its multifunctional services (pay bills or make utility/tax payments, calls, stock transaction, purchasing tickets etc); these modern services are not popular among users as justified by the findings of this research.
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Ugwu, A. (2018). The Impact, Advantages of Using Automated Teller Machine (ATM) in Nigeria Banking Industry. Afribary. Retrieved from

MLA 8th

Ugwu, Anderson "The Impact, Advantages of Using Automated Teller Machine (ATM) in Nigeria Banking Industry" Afribary. Afribary, 29 Jan. 2018, Accessed 29 May. 2024.


Ugwu, Anderson . "The Impact, Advantages of Using Automated Teller Machine (ATM) in Nigeria Banking Industry". Afribary, Afribary, 29 Jan. 2018. Web. 29 May. 2024. < >.


Ugwu, Anderson . "The Impact, Advantages of Using Automated Teller Machine (ATM) in Nigeria Banking Industry" Afribary (2018). Accessed May 29, 2024.

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