The History of the Automated Teller Machine

It is difficult to imagine life without the automated teller machine, or ATM. In the old days, before their widespread use, it was necessary to stand in line at a bank to withdraw spending money. The free lollipop you took away at the end of the transaction was small compensation for the long wait. Much of the information below was gleaned from ATMMachine.com.

Basics

ATMs read a magnetic strip or computer chip on a card inserted by a customer. The strip contains the customer's banking information, including the amount of money available for withdrawal from her account. No matter where the customer's physical bank is located, her account can be accessed from any participating ATM in the world.

Origin

The first automated cash machine was designed by Luther George Simjian. The first ATM of his build was installed in 1939 by the City Bank of New York, known as Citibank today. His invention, the Bankmatic Automated Teller Machine, was removed after just six months because of a lack of customer interest. The inventor claimed that only gamblers and prostitutes were using his machine, according to a 1997 New York Times obituary. Simjian died at age 92.

First Electronic ATM

In 1967, more than a quarter of a century after the failure of Simjian's machine, the British company De La Rue unveiled the first electronic ATM at a Barclays Bank in North London. The machine's development was led by John Shepherd-Barron, who became a recipient of the Order of the British Empire designation in 2005. His machine accepted a single-use voucher and dispensed envelopes prepackaged with 10-pound notes.

Personal Identification Number

James Goodfellow, of Smiths Industries Ltd., developed a means of limiting access to a customer's accounts with the personal identification number, or PIN, which was first used in the De La Rue machine. Before arriving at the idea, Goodfellow had looked into other identification methods, including fingerprinting, voice recognition and retinal patterns.

Networked ATMs

Donald Wetzel, of Irving, Texas-based Docutel Corp., developed the first networked ATM, called the Docuteller, in 1968. Chemical Bank of New York City started using it in 1969, and it was patented in 1973.

Numbers

There were an estimated 1.5 million machines in use worldwide as of 2006, according to the ATM Industry Association.

References

• History of the ATM

Resources

• MSNBC: Are There Too Many ATM Machines?
• ATM Industry Association
• New York Times: Simjian Obituary