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The study examined the effects of Automated Teller Machine (ATM) on demand for money. Primary data were analysed using difference of means and probit analyses. The study revealed that ATM has reduced queues in the banking hall significantly. The result showed that the frequency of demand for money to meet transactionary and precautionary motives is significant greater through ATM while average amount withdrawn is smaller compared to teller (p<0.05). Also the probability of a resident using ATM is 0.92. Investment in quality ATM and provision of alternative source of electricity are ways of improving the effectiveness of ATM.
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INTRODUCTION
Automated Teller Machine (ATM) is a cash dispenser that enables bank customers to enjoy banking services without coming in-contact with bank tellers (cashier). ATM helps to perform the duties of the cashier in term of payment services. It is a computerised telecommunication device that provides the clients with access to financial transaction in a public place without the need for a cashier, human clerk or bank teller. ATM is also known as cash point or cash machine (Ogunsemore, 1992).
ATM was introduced into the Nigerian economy by Central Bank of Nigeria (CBN) in 1989. Now defunct Societe General Bank of Nigeria (SGBN) was the first commercial bank in Nigeria to introduce ATM in 1990. The trade name for SGBN's ATM was ''cash point 24". This was followed by "First Cash" ATM introduced by First Bank Plc. in 1991. The aim of CBN on the introduction of ATM was to reduce the rate of cash withdrawal from the counter through the use of tellers as well as to prepare Nigerians for the incoming cashless economy.
However, as part of banking reforms that started in July 2004, the Central Bank of Nigeria (CBN) in its quest to improve bank services, achieve cashless economy and decongest the banking halls; mandated commercial banks operating in Nigeria to install Automated Teller Machines (ATMs) in the their premises and other strategic locations to serve their customers. As fallout on this directive by apex bank, studies (Fanawopo, 2006; Olatokun and Igbinedoin, 2009) revealed that the Nigeria's debit card transactions rose by 93 percent between January 2005 and March 2006 over previous years owing to aggressive roll out...