On the subject of notes dispensed by ATM machines, the local Kroger grocery has a self-checkout lane. If you pay by debit card, it asks you if you want cash back. My wife and I occasionally ask for some, and then regret it - the machine dispenses only $5 bills. They stack up in the wallet in a hurry.
I am old enough to remember when ATM machines dispensed $5, $10 and $20 bills. Heck, I can remember when tellers did it.
I suspect that the banks switched to only $20's because many bank customers got in the habit of withdrawing as little money as possible at a time, lest they run the risk of having too much and somehow losing it.
Our coin shop is around the corner from what used to be the First National Bank of Chicago. Several years ago they announced that they were going to begin to charge a service fee for ATM withdrawals over a certain number of transactions per month. A customer who worked there told me that this was because many of the ladies who worked in the building, or nearby buildings, would come to the lobby on their lunch hour and withdraw $10 for lunch money every single day. The lines at the machines were horrendous.
Using only $20s cuts down on the total face value of bills that the bank has to tie up in the machine, as well as guaranteeing a $20 minimum transaction
A few years back I worked for an armored car service that replenished ATM machines. At that time I regularly installed 5, 10, 20, 50, and 100 dollar notes in the machines. The denomination used depended on where the unit was located for traffic volume and what the business owner preferred be dispensed to his/her customers.
Typically, inner city, crime ridden areas had small denominations as well as machines used in colleges or other schools. Essentially, those groups who are financially challenged on a daily basis couldn't withdraw a 20 if they didn't have the available funds, but they could get a 5 or a 10.
People would withdraw money and pay the transaction fees and have less than 5 dollars in their accounts. Living week to week and hand to mouth is more common than most people think.
The denominations of 5, 10, and 50 were being phased out because the bookkeeping and cash handling was becoming cost prohibitive and it was easier to load the machines with all 20's or with 20's and 100's instead of all the denominations which would occupy more dispenser "cassettes" and thus limit the total dollar amount to be dispensed by the machine between services.
All the ATM machines are monitored as to the average volume and the average amount of withdrawal per transaction in order to optimize the amount of currency needed. As an example, one wouldn't load a machine with 50,000 dollars if it only used $12,000 on average between services because this would tie up money that is sitting in a machine and not making any profit through interest.
The use of 20's is the most common now at most locations, however it is common for 100 dollar machines if you frequent casino's because they want you to part with as much of your money as possible as fast as possible. It was normal for me to replenish a Casino machine 2-3 days a week and a typical Walgreen's in a busy city location would take $60,000 to $80,000 each visit in 20's and a casino machine would take $150,000 to $200,000 in 100's with multiple machines on site in case of a machine running out of cash.
As a side, I watched a disguised semi being unloaded in the Chicago Federal Reserve docks direct from the BEP with pallets of "bricks" of 100's. They took 20 pallets off with a forklift and I mathematically figured that the truck contained about half billion dollars in new currency. One never knows what passes you by as you drive down the expressway!