Today’s automated teller machines (ATMs) have a plethora of capabilities. Using your debit or credit card — or using contactless payment options on your smartphone — you can view your account balance, deposit a check, withdraw cash, transfer funds, and much more.
But capabilities were much more basic when the first ATMs were invented, which was a lot earlier than many people realize. Over nearly 70 years, ATM technology has changed the way we live, and it’s also changed the way we bank. Let’s take a walk through banking history to reflect on how the ATM first came about, how use of the units spread around the world, and how they are used today.
When Were ATMs Invented?
ATM technology was developed in the 1960s. It’s hard to pinpoint who invented the first ATM, as it is a very complicated system that evolved over time with international contributions. But there’s clear evidence for where the first ATM appeared, when it made its way to the United States, and how ATM use evolved into an essential financial service for customers around the globe.
Who Invented the ATM?
The invention of the ATM is credited to several different people in several different countries, including John Shepard-Barron and James Goodfellow from the United Kingdom and Luther Simjian and Don Wetzel in the US. But some also credit the invention to several different engineering companies including De La Rue (England), Speytec-Burroughs (England), Asea-Metior (Sweden), and Omron Tateisi (Japan).
The ATM Makes Its First Appearance
The first ATM rolled out at a North London branch of Barclays bank in 1967. This first ATM did not use plastic credit cards as they do today. Instead, it used paper vouchers on which radioactive ink was printed, and read by the machine. Each customer had an identification code, which allowed them to withdraw up to £10 at a time. In the following months, ATMs popped up in Sweden, Japan, and other locations in Europe.
The Advent of the PIN
Nowadays we all know that we cannot access your bank account through an ATM unless you have your personal identification number (PIN). But that wasn’t invented until three years after the first ATM appeared in London. In 1970, James Goodfellow developed the PIN system which allowed ATMs to become far less dependent on human bankers.
The ATM Crosses the Pond
In 1969, many banks in the United States began to see the benefits of ATMs. So which bank installed the first ATM machine in the United States? The very first US bank to install an ATM was a Chemical Bank branch in Rockville Center, New York.
While the US was far from the first country to adopt the ATM, it did make significant progress in ATM innovation. The first drive-up ATM was installed in Baton Rouge, Louisiana in 1980, catering to the country’s car-loving culture. The first talking ATM was installed in San Francisco in 1999, equipped with Braille keypads for blind customers.
As with all new technology, ATMs had their share of technical and functional issues. Early ATMs were especially prone to theft, as many were managed in different ways. Some ATMs required customers to insert special coins which were returned to the customer via mail, while others dispensed money in plastic cartridges.
Most ATMs were large, bulky, and prone to frequent breakdowns. In 1977 one ATM user explained why she preferred face-to-face interactions to automated banking: “At least the girl behind the window doesn’t die in the middle of a transaction.”
But while ATMs had their downsides, their popularity encouraged other banks to implement the services, and for engineers to continue improving the technology. Banks also realized the benefits of standardizing technology to be compatible with national banking networks.
Today, ATMs are ubiquitous. You can find them anywhere, and they don’t necessarily need to be connected to banks. They offer a wide variety of services and the technology is consistent and secure, making them invaluable even in an increasingly cashless world. Today there are more than 3 million ATMs in the world, some of which even accept Bitcoin or smartphone access. Others feature video functionality, allowing customers to have face-to-face chats with tellers. ATM technology has even found its use in other industries, dispensing items including movie tickets, stamps, and medication.
ATMs Are the Tip of the Iceberg
The automated teller machine was one of the first pieces of financial technology the world has ever seen — and it was our first look at self-service banking. Today, bank customers can do much more through mobile banking, including depositing checks using photos on a smartphone app, and viewing credit scores. But in today’s age of smartphones, Wi-Fi, and increasing demand for remote services, the ATM seems like a relic of times past.
BMA is an industry-leading provider of technology for financial services. With our deep industry know-how and decades of experience, we’re always on the lookout for innovative technology that provides a simple customer experience, and that keeps your bank looking toward the future. Contact BMA today to learn more about our technology solutions for banks, ILCs, and credit unions.