The definition of a good banking experience may differ from person to person. But one thing that everybody can agree on is that standing in long queues at a bank’s branch to withdraw cash is rarely a good experience. This is why there are Automatic Teller Machines (ATMs) that allow you to seamlessly withdraw cash. There are currently more than 2.2 lakh ATMs in India that people use for their everyday banking requirements.

Traditional ATMs and Micro ATM Machines have revolutionised the system. About 49.57 crore debit card transactions were placed at ATMs in March 2025, compared to 44.74 crore in February 2025. This shows that ATMs are still widely used across the nation. Discover the difference between traditional ATMs and Micro ATM Machines.

What is a Traditional ATM?

Traditional ATM (Automated Teller Machine) refers to self-service kiosks that allow the bank’s customers to conduct transactions without a human teller being required. In simple words, these machines help you withdraw money without standing in long queues.

ATMs’ common features include cash withdrawals, balance checks, mini statements, and PIN changes. Users normally transact with the machine using their ATM card and PIN. Hence, everyday banking becomes easy, fast, and convenient.

These machines are massively rolled out in cities and towns and high-pedestrian areas such as malls, transport hubs, and business centers. Although they are now integral to using an ATM in urban India with limitations, the cost of the infrastructure and maintenance is high. ATMs do provide the convenience of withdrawing cash 24/7, but you have to pay charges for ATM withdrawals after the set free limit.

What is a Micro ATM Machine?

A Micro ATM machine is a compact device that can be carried around, turned into a portable banking terminal, and used by banking agents or Business Correspondents (BCs). Created under the Aadhaar-enabled Payment System (AePS) umbrella by NPCI, these machines facilitate basic banking services in regions that lack the traditional banking infrastructure.

Unlike the normal ATMs, the Micro ATMs do not need a debit card. Instead, they use Aadhaar-based biometric authentication which is usually in the form of a micro ATM machine with a fingerprint scanner. Since they are authenticated, the customers can conduct vital transactions such as micro ATM cash withdrawals, balance enquiries, mini statements, as well as cash deposits in some cases.

These devices are popular in rural villages, tribal areas, Tier-3/Tier-4 towns, and places where a traditional ATM cannot be installed. With the help of a micro ATM service provider, a local kirana shop can easily become a financial access point.

Micro ATMs enable last-mile banking. They close the digital divide, limit reliance on the brick-and-mortar branch network, and provide a trusted, inexpensive means for tens of millions to get their funds.

Differences Between Micro ATM Machines vs Traditional ATMs

Traditional ATMs are self-service bank outlets that facilitate cash withdrawals, mini statements, cash deposits, and more. The Micro ATM machine, on the other hand, is a mini version of the ATM. This means that there are differences between Micro ATM Machines and Traditional ATMs. Here’s a clear comparison between traditional ATMs vs Micro ATM machines:

Although they both provide essential ATM services, the micro ATM business model is different. Such devices are perfect for areas where the location of banks is not affordable because of the terrain, the population’s density, or the cost.

In contrast to the conventional ATMs that use ATM cards, Micro ATMs function based on the Aadhaar-linked bank accounts and fingerprint authentication. Furthermore, Micro ATMs usually collaborate with low-bandwidth internet or even offline modes, enabling them to continue the service in areas with low network connectivity.

Who Uses Micro ATMs the Most in India?

India’s rural and semi-urban users are the main consumers of Micro ATMs because rural areas and even semi-urban ones do not have enough physical branches of banks, or regular ATMs. These include:

• Pensioners and senior citizens collecting monthly pensions
• MGNREGA workers and daily wage earners receiving DBT subsidies
• Farmers accessing seasonal government transfers
• Women beneficiaries under welfare schemes
• Small shopkeepers and villagers need local cash withdrawal points

Micro ATMs have been particularly useful in schemes such as Jan Dhan Yojana and Direct Benefit Transfers (DBT). They ensure money from the government schemes reaches its intended recipients in far-flung areas of the country.

Thanks to dependable micro ATM service providers, even 3 and 4-TIER cities and towns have access to banking facilities. Such agents with Micro ATMs are a link between policy and the people, and for millions, the first contact with formal banking.

Charges and Transaction Costs: Micro ATM vs. Traditional ATM

ATMs are helpful and promote seamless banking. However, charges for ATM withdrawals are still a big concern for individuals. Here are the charges for ATM withdrawals for both traditional and Micro ATM machines:

Traditional ATM

• Most banks allow 5 free ATM withdrawals per month (across bank and non-bank ATMs).
• Beyond this, users pay ₹23 per withdrawal, depending on their bank and location.
• Charges also apply for balance enquiries after a limit.

Micro ATM Machines

• Not governed by standard ATM rules. Agents may charge ₹10–₹20 per transaction, often set by the bank or micro ATM service provider.
• RBI mandates a ₹10,000 limit per withdrawal, but users can make multiple transactions daily if needed.
• No charges for balance checks or Aadhaar-based verification in most cases.

Benefits of Starting a Micro ATM Business

Opening a Micro ATM business has proven to be a lucrative business opportunity for small retailers, CSC agents, mobile recharge vendors, and kirana store owners. These people already have consistent footfalls of customers, and the inclusion of a Micro ATM service can increase income and create trust in the community many times over.

The entry level has been very low, and you only need a smartphone, a micro ATM machine with biometrics and fingerprint, and a partnership with a trusted micro ATM service provider such as Finkeda. The transactions are completely Aadhaar-empowered and safe, and they comply with its RBI norms.

The ROI is positive since the agents receive a commission for every transaction made, whether the withdrawal of cash from the micro ATM, the balance enquiry, or the mini statement. With Finkeda’s assistance, onboarding is easy, and the training can be done with minimal effort. Thus, you will be in a position to begin earning from the first day, driving financial inclusion in your locality.

Conclusion

The rise of Micro ATM machines brings a significant shift in democratising ATM services all over India. From the ATM in urban cities to micro ATM cash withdrawals in remote villages, banking has become as inclusive as it can get.

Whereas the traditional ATMs cater to the urban masses with heavy requirements, Micro ATMs are solving genuine issues in rural India. It is providing cash, connectivity, and a facility at the doorstep. If you’re a merchant, you can enrol for Finkeda’s Micro ATM and provide easy and quick ATM services to your customers.

FAQs about Micro ATM Machine vs Traditional ATMs

1. What is the key difference between a Micro ATM and a traditional ATM?
   The difference lies in the fact of accessibility and technology. As opposed to the fixed kiosks employing cards and PINs for traditional ATMs, Micro ATMs are hand-held, portable devices, and are based on Aadhaar-based fingerprint authentication.

2. Can Micro ATMs perform the same functions as regular ATMs?
   Not entirely. Micro ATMS basically provides cash withdrawal, balance enquiry and mini-statement. In the case of traditional ATMs, there are additional services such as card-driven money transfers, PIN changes and even cheque deposits.

3. Who benefits the most from using Micro ATMs over traditional ATMs?
   People living in the villages and remote places, farmers, senior citizens and those who do not have easy access to banks and ATMs benefit the most from Micro ATM services.

4. How secure is a Micro ATM transaction?
   Micro ATMs are very secure. They adopt Aadhaar-based biometric authentication, which greatly minimises the risk of fraud or identity theft.

5. What’s the transaction limit for Micro ATM withdrawals?
   Following RBI norms, Micro ATM cash withdrawal is only up to ₹10,000 per transaction. However, this may differ with different micro ATM service providers.