Perceptions of Students on the use of ATM cards


Mrs. Suriya Kala Pala
Associate Professor


The paper tries to explore the various perceptions of the student towards ATM cards and its services. In today's world the automatic teller machine is here to stay and this has certainly increased the efficiency of the banking services. In today's world one cannot think of a life without a ATM card. The study proposes to explore a small group of students and their perceptions and opinions of ATM services. This is an interesting area as students are not employees but still have access to ATM cards and they are a huge target group for various banks. Banks have nowadays come with student friendly zero balance accounts or a very little minimum balance accounts to address the student community. This study is relevant in understanding and giving an insight into the young bankers of the nation.

The  Indian banking sector has undergone revolutionary changes since liberalisation . One of the major sectors which is seeing tremendous changes is the banking industry. The changes have not only been in the public sector banks but also in the private sector banks in India. The changes include better services, core banking services, internet services, on line banking and a host of other facilities that are implemented for the benefit of the customer. Plastic culture and plastic money and the use of  ATM cards as a result of atm machines provided has brought in a sea change in the way bakning is done by customers.'"The financial sector reforms in India began as early as 1985 itself with the implementation of the recommendations of Chakravarti committee report (Report of the Committee to Review the Working of the Monetary System). But the real momentum was given to it in 1992 with the implementation of recommendations of the Committee on Financial  System  (CFS)   (Narasimham,  1991) .  Almost all of the recommendations of the CFS have been implemented in a phased manner. In 1998 another committee, the committee on Banking Sector Reforms (BSR) (Narasimham, 1998) was constituted. The recommendations of the BSR committee have also been implemented in a phased manner."1

In 1992 India faced a Balance of payment crisis and this paved way for the financial reforms and leading among the reforms that were necessary for the economic revolution was the Banking reforms. Liberalisation brought in a lot of vibrancy in the Indian economy. The increase in incomes and a growing middle class and its spending power has really put the thrust to the banking sector.

The rising middle class has relevance in the spending patterns of the consumers and this has resulted in the growth of plastic money which is all types of cards, credit, debit and pre paid cards. New market reports have shown that this has opened enormous opportunities for card issuers, manufactures and suppliers.

Research has shown that the number of debit cards issued has grown by 33% in the financial year 2011 as against the financial year 2010.The payment transactions using credit and debit cards have increased and there is a huge growth in the same. Increasing consumer preferences, low card penetration, increasing card spending, backed by strong governmental support have been pushing the growth in the card market.

Studies on innovation and offerings in payment card industry will bring in a lot of transparency, ease and security in the use of the cards. Reward points, other benefits and discounts offered by the bankers has shown an increasing trend in online shopping with the use of cards.

One of the research Studies in the card market sums up the current scenario

"Our research also indicates that despite the financial turmoil and decline in credit card base, the overall trend will remain positive during the forecast period backed by increasing transaction volume, innovations, and guidelines crafted by RBI. In fact, RBI launched a domestic payment card (RuPay) and a POS switch network for issuance and acceptance of payment cards which will enhance the growth of players in the industry."2

Therefore the Indian card market is bubbling with activity. The culture of plastic money has become widely accepted by the bubbling Indian populace. The increase of the use of  cards has become manifold and tens of thousands of cards  are being issued  with crores of money being spent by customers using the same.

In this context a specific area of usuage of plastic cards using the ATM has been looked into. With the growth of plastic money banks have increased their services and access points to the customers with the help of increasing the number ATM. SBI (state bank of India ) has one of the largest networks of ATMs in India.

Introduction to ATM Machines

ATM, the Automated Teller Machine , is also called  by various names as Automatic Teller Machine , automated Banking machine or a cash point or cash machine  and is also sometimes called as the hole in the wall colloquially in England. It is a computerised telecommunication s device of the financial institution for its clients and also the clients of other banks to do financial transactions without the help of a human clerk or a bank teller. There are various regional variants in names held by trademarks of some of the banks. "On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN).3

Objectives and methodology of the study

1. The draw the profile of the urban student card holder
2. To identify factors that influences the use of ATM cards
3. To assess the benefits of usage of student card holders
4. To understand the students perceptions towards internet banking

Research Methodology

Both primary and secondary sources of information have been used for this study .Secondary sources were books, websites, research articles primarily which gave information on the use of plastic cards , ATM machines and the banking sector in India. The primary data was collected from a survey using a questionnaire.

The students of integral institute of management were chosen as respondents.  A convenience sampling method as it is fast, easy and the subjects are readily available. It is a non Probability sampling technique.

Sample size:  50 students were chosen from among 220 students of IIAM in Visakhapatnam. IIAM is a multi cultural campus with students from different states accessing education in this 25 year old institution .The students are Post graduate students of Management.

Questionnaire: The questionnaire was designed to understand the perceptions and the use of ATM cards among students. The questionnaire covers the demographics and the questions are open ended, dichotomous and multiple choice questions.


Gender: 68% of the respondents are men and 34% are women.

Age of the respondents: majority among the group were 22 years of age (38%),  the next majority is 21yrs (24%), 23 yrs (16%),24 yrs (10%),25 yrs(10%),27 yrs(6%)and 20 yrs (1%).

The majority of the respondents are in the age group of 22, 23, 24 yrs and the age span is from 20 yrs to 27 Yrs.

Access to ATM cards; Majority of the students (90%) had ATM cards to access their bank account. 10 % did not have an ATM card and the majority among those not having the cards are women. This is a clear indication that the young student population has banking needs and they must be addressed by the banks. Many banks have taken steps in the right direction by creating accounts specifically for students.  The Co-Branded cards issued by the Institution and the bank together are a step in this direction.

ATM attached to Parents account: Among the respondents majority of the respondents 29 (59%) had their own accounts and their accounts were not attached to that of their parents. 15(30%) had the ATM card attached with the account of their parents.  59% having their own accounts is a major indication that the young student community prefer to have independent accounts.

The most preferred bank from the students is SBI (64%), followed by ANDHRA BANK (6%), IDBI(4%) and the rest of the students banked with ICICI,PNB, CANARA BANK,OBC,  KARUR VYSYA BANK and SYNDICATE BANK. The most preferred bank even among students is SBI.

The two major reasons why the students use the card are for convenience and Security. Though many of the students feel that flexibility, security, prestige and convenience and the features are all the factors that are important in possessing an ATM card.

Most of the students use the card predominately for access to money and majority of students access the ATMs atleast four times a month

Majority of the students spent around 2-3 minutes in the ATM centre. Most of the students are unhappy with the insufficient funds and problems with the functioning of ATM machines.

The majority of the Students rated the services of the ATMs as good.

The various suggestions given by the students to improve the services is to make the operations less complicated, provide change, make it highly secure and also make ATMs easy for uneducated customers.

Overall it was encouraging to note that 100% of the students felt that internet banking is a boon.


Though this pilot study was done in a limited time, it threw light on the students perceptions and behaviour towards ATMs. It was encouraging to note that the young educated students in their 20's have their own accounts and ATM cards or access to the same. This is a very huge segment for the banks and if they create a favourable impression on the minds of young customers, it can go a long way in creating valuable customers for the banks with long standing relationships. All the young educated minds wanted more facilities from ATMs and highlighted on the need for security in transactions.  To conclude and to go with the theme of the seminar, the young educated minds unanimously feel that internet banking is a BOON to the society.

H. P. Mahesh,2006, Working Paper, Institute of Social and economic hange
Indian payment Card forecast to  2012.

Mrs. Suriya Kala Pala
Associate Professor

Source: E-mail March 14, 2012


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