What is the main difference, from a cost point of view, between human tellers and ATM machines?

Question

Microeconomics

Answer 1

Given a quantity of output, firms will minimize costs. Basic optimization states that banks will minimize the cost of producing teller services. There are two chief inputs inputs in teller services: ATMs and human tellers. When the price of labor rises, firms substitute humans for ATMs in an effort to cut costs. Simple economics.

There are high fixed costs in installing an ATM. Assuming that the firm will operate indefinitely into the future, the ATMs may be lower cost per transaction.

Production can also be constrainted by time. A machine is able to "work all the time." For more econ information please see:
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Answer 2

I don't know how much an ATM machine costs, but a teller gets paid about 25,000 a year plus benefits, depending on the area of the country. Some customers like dealing with a human being instead of a machine and I think, to the bank, that is a good way to get customers and do the customer service thing. I prefer direct deposit into my account and an ATM to get the money out, but some of my co-workers would rather stand in line at the bank and use a teller. It is a social call for them and they like to joke around with a human. The machines don't laugh at jokes and smile at you!

Answer 3

From a cost point of view---human tellers are paid salaries and benefits for the limited hours they work each day, and require constant maintenance. After purchasing and programming ATM machines, they perform 24/7 without additional cost and relatively low maintenance. But that's just a cost point of view!

Answer 4

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Answer 5

An ATM works 24/7, doesn't need a break, or get sick.