This paper titled, "Analysis of the negative effects of the automated teller machine (ATM) as a channel for delivering banking services electronically in Nigeria" proposed that the ATM system of delivering banking services not only contribute to the increasing rate of bank fraud but equally lures Nigerians into profligate expenditure. Using a sample of 600 respondents conveniently selected from two states of the federation (Lagos and Anambra), and analyzing the hypotheses formulated with chi-square, it was found that results were consistent with the propositions made. Against these backdrops, it was recommended that banks should; strive to increase their security layers to subvert the tricks of web scammers, limit the amount which customers may be allowed to withdraw at a time and provide electronic alerts to customers' phone for all transactions carried out on their bank accounts through ATMs, cooperate instead of competing in stemming the ATM fraud menace and educate customers on the need to safeguard their PINs. Government was encouraged to; promulgate laws that will guide e-business including ATMs in Nigeria, provide employment, check the indiscriminate issuance of ATM cards by banks and so on. Customers were advised to; avoid replying unsolicited mails and text messages, not to compromise their PINs, maintain a separate account which is not placed under ATM if they are given to impulsive expenditure. Interested researchers were as well given a focus for further research.