Happy 50th birthday, ATM, you've come a long way

Inventor of money dispenser says idea came to him in the bathtub

John Egan
Personal Finance Writer
Writes trendy stories about credit cards.

Happy 50th birthday, ATM

The ATM now qualifies for AARP.

The first ATM – then more broadly known as an automatic cash-dispensing machine or “robot cashier” – was installed June 27, 1967, at a Barclays bank branch in the London suburb of Enfield, where a blue plaque marks the historic spot.

Today, that Adam of the ATM from 50 years ago has lots of descendants. Across the world, the ATM family had about 3.2 million members at the end of 2015, according to Retail Banking Research, a consulting and research firm. Of those, about 434,000 were in the U.S., which has more ATMs per capita than any country.

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Chase Bank photos

1969: Chemical Bank, a precursor of Chase Bank, introduced the ATM to the U.S. two years after a cash-dispensing machine debuted in England.

Collectively, the worldwide family of ATMs has revolutionized banking, giving us around-the-clock access to money via ATM, debit and credit cards (read the fine print before seeking quick cash with your credit cards!) without interacting with a human.

For instance, the 16,000 ATMs operated by Chase Bank, the largest U.S. bank based on assets, can perform about two-thirds of the routine transactions, such as deposits and withdrawals, that traditionally have been carried out by non-automated tellers (aka real bank employees), according to Ryan Crowley, head of branch systems and innovation at Chase.

“Consumers can now accomplish most all their daily banking needs at an ATM,” says Bruce Renard, executive director of the National ATM Council, a trade group. “And in today’s time-strapped society in which we live, ATMs are a real time saver of growing value.”

It was Chemical Bank, a previous incarnation of Chase Bank, that introduced the ATM to the U.S. On Sept. 2, 1969 – two years after the ATM debuted in England – Chemical Bank installed the first U.S. ATM at its Rockville Centre branch in New York. This feat happened six weeks after the U.S. put men on the moon, as noted by Wired magazine.

The machine, known as the Docuteller, “marked the first time reusable, magnetically coded cards were used to withdraw cash,” according to Wired. Two years later, in 1971, the Total Teller came along. That machine allowed a customer to deposit money, check an account balance and transfer money between accounts.

“It struck me there must be a way I could get my own money, anywhere in the world or the U.K. I hit upon the idea of a chocolate bar dispenser, but replacing chocolate with cash.”

According to History.com, several inventors worked on early versions of a cash-dispensing machine. However, Don Wetzel, an executive at Docutel, a Dallas company that made automated baggage-handling equipment, is generally regarded as the father of the modern ATM. Wetzel is said to have hatched the idea while waiting in line at a bank.

In a 1995 interview for the National Museum of American History, Wetzel, who’s still with us, indicated he and others who worked on the Docuteller hadn’t envisioned how universal the ATM would become.

“At that point in time, we never even thought of having off-premise ATMs as we see them today, you know, in shopping centers and supermarkets, universities, places like that,” Wetzel said. “We were talking machines strictly located on bank premises. We didn’t even feel that we would have one in every branch. We thought we’d get some key branches and the home office.”

Actually, a British investor generally is credited with devising the first cash-dispensing machine, the one installed 50 years ago. John Shepherd-Barron, who died in 2010, said he came up with the concept while taking a bath.

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2016: Chase Bank began rolling out 1,500 eATMs, enhanced ATMs that can be accessed using a smartphone – no bank card or credit card necessary.

“It struck me there must be a way I could get my own money, anywhere in the world or the UK. I hit upon the idea of a chocolate bar dispenser, but replacing chocolate with cash,” Shepherd-Barron told BBC News in 2007.

In 1967, English actor Reg Varney was the first customer to withdraw cash from Shepherd-Barron’s brainchild, known as DACS, short for De La Rue Automatic Cash System.

But Varney didn’t do it with any sort of plastic card. Rather, according to BBC News, the DACS machine used checks “impregnated” with carbon-14, a mildly radioactive substance. The machine detected the carbon-14 and then matched the check against a PIN. The ATM installed at Chemical Bank in 1969 was the first to rely on a card, instead of an “impregnated” check, for transactions.

Both the British and American versions of the money machine were prone to problems, such as hacking – yes, hackers were around then, although not as sophisticated as they are today – and weather-related breakdowns.

“These early ATMs were big, clunky, unreliable, and not incredibly popular,” Smithsonian.com says.

While the ATM premiered in the late 1960s, it didn’t become a common fixture right away. For instance, Bank of America says it had expected its first ATM, installed in September 1969 in San Francisco, to have attracted more than 4,000 customers. But by the end of 1970, only 300 customers had toyed around with it. It would be another decade till the ATM became widespread and yet another decade or so before freestanding ATMs came along.

In recent years, the presence of ATMs has grown as banks have shuttered branches to adapt to an increasingly ATM-oriented society as well as to cut costs. The U.S. lost more than 6,000 bank branches from 2008 to 2016, according to a study by the nonprofit National Community Reinvestment Coalition.

Today, banks only operate about 40 to 45 percent of the ATMs in the U.S., according to David Tente, executive director in the U.S. and Latin America for the ATM Industry Association, a trade group. The majority are independently run ATMs you often see at bars, gas stations, casinos and other non-bank locations.

“Banking has become far more self-service, thanks mainly to the ATM,” Tente says. “Most customers now deposit checks using their phone or the ATM. Few people want to stand in line at the teller to withdraw cash. The consumer pretty much expects to have access to cash any time, anywhere.”

A 2016 survey by TD Bank found that 61 percent of Americans visit an ATM at least once a month, with usage being heaviest among Gen Xers and baby boomers, and usage tilting toward men over women. In all, Americans tapped ATMs for 5.8 billion cash withdrawals in 2015, according to a study by the Federal Reserve System. The average cash withdrawal that year was $122.

“Cash is still king in the U.S., and consumer spending is still key to our national economy,” Renard says. “And with our large numbers of underserviced areas and unbanked and under-banked citizens, widespread access to cash via retail ATM outlets serving these areas will continue to remain a vital component of everyday life for millions of Americans and for many years to come.”

“Consumers can now accomplish most all their daily banking needs at an ATM. And in today’s time-strapped society in which we live, ATMs are a real time saver of growing value.”
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Photo by Jo Ellen Meyers Sharp

2017: As the number of U.S. bank branches shrinks, Indiana-based Salin Bank is one of several banks using interactive ATMs that let customers consult with a teller via video.

Looking ahead at our everyday lives in the ATM world, observers expect the technology of these machines to keep advancing far beyond what was developed 50 years ago, including:

“The technologies that are said to make the ATM extinct, such as phone payment apps, are now being embraced by the industry as a means for consumers to withdraw cash from an ATM,” Pappathopoulos says.

Despite the new ATM technology on the horizon, one thing won’t change: We’ll still be itching to get our money in a flash.

“Consumers are still going to expect access to cash around the clock and across the globe. Banks know it. Independent ATM deployers know it,” Pappathopoulos says. “Increasingly, our industries will collaborate to ensure those consumers have cash access where and when they want it.”

And we’ve got the ATM to thank for that access.

See related: Would you trust your cards at these sketchy ATMs?Banks add virtual tellers as number of branches shrinks


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Updated: 11-24-2017