The Interesting History and Function of Automated Teller Machines
ATMs have been around since 1967, and they have since played a pivotal role in banking structures and people's lives around the world. Surprisingly, these money-dispensing devices don't have a single inventor. Instead, modern ATMs are a combination of a bunch of different inventions that have been created over the years.
In the early days, some ATM machines would only accept deposits, and others could only dispense cash. They were niche automated teller devices that served the particular bank's purposes as necessary.
The history of ATMs is quite an interesting story of engineering and banking history.
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The Early Days of ATMs
American Inventor Luther Simjian is often credited as the inventor of the first automated banking machine, at the time, patented as the Bankograph. This device could automatically accept cash or checks at any time of the day.
Comically, while these machines may seem like an impressive convenience for 1960, apparently the only people who wanted to use them were prostitutes and gamblers who wanted a faceless way to make deposits.
The Birth of Modern ATMs
While the Bankograph was the first iteration of a machine resembling an ATM, it didn't quite make the cut in modern society.
By the end of the 1960s, more people in the U.S. were willing to use self-service banking as new technology became more accepted. One might think of this initial hesitancy and ultimate acceptance in the same light as when online banking first came into play in the 2000s.
By 1967, an inventor from Scotland named John Shepherd-Barron had an ingenious idea while taking a bath: vending machines for candy existed, so why not for cash?
Barclays, the famous London bank was actually sold on the idea by Barron, and after building a series of prototypes, the first of the devices were installed at a branch in the Greater London boroughs.
These first ATMs or automated money dispensing machines used paper vouchers with radioactive ink to withdraw cash in place of credit or debit cards. The most a user could withdraw at the time was £10.
While Londoners were busy getting acquainted with automated telling; in the U.S., a Dallas, Texas-based engineer named Donald Wetzel had come up with his own ATM design. These machines were the first to use plastic cards with magnetic strips. In 1969, a banking branch in Long Island was the first to install one of these early machines.
How ATMs Spread Across the World
By the early 1970s, banks across the US and London had signed up to have their own ATM machines. These banks used massive advertising campaigns to get consumers to be comfortable with the new machines.
It wasn't until 1977 when ATMs were fully being integrated into modern society. Citibank invested $100 million USD to install ATMs all across NYC. The following year when a massive snowstorm shut down the city, ATM usage increased by 20% as all of the banks were closed.
Citi's successful investment proved that ATMs were here to stay, and all major banks across the world today have ATMs implemented to speed up banking processes.
In 2019, there are now 2 million ATMs across the globe, though their use is on the decline as credit and debit cards further infiltrate modern transactions. Even still, ATMs will likely never disappear as it would take moving to a fully cashless society.
In fact, as the use of ATMs for pure money dispensation has decreased, the rise in ATM-like machines for other purposes like airline ticketing, cryptocurrencies, and even medicine has increased.
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Now that we fully understand ATMs interesting past, here are 9 interesting facts about automated teller machines.
- Not mentioned in this article, the first cash-dispensing machine was first installed in 1966 in Japan, but it was tied to a credit account, not one's bank account.
- One big factor of why London banks first implemented ATMs was union demands to end Saturday banking hours.
- The first ATMs used radioactive papers in-place of cards with Carbon-14 on them. This is also the same carbon isotope that is used in carbon dating.
- After the first ATM was installed at a Barclays branch in London, the second was installed in Sweden.
- The first ATM heist was reportedly in 1968 when a Swedish thief discovered how to calculate PIN numbers for ATM cards. He reportedly traveled around the country emptying the machines.
- In 1971, there were only 11 U.S. banks that had ATMs. Just 23 years later, U.S. banks had 100,000+ ATMs nation-wide.
- ATMs prior to 1996 in the U.S. were prohibited from charging for the transaction. After the law was changed that year, banks slowly started to implement ATM surcharges.
- ATMs at first weren't connected to wireless networks. By 1999, nearly all of the world's ATMs were connected to shared networks.
- An Iowa-based grocery store named Dahl's Foods was the first grocer to install ATMs.
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