On 27 June , comedy actor Reg Varney took money from a cash machine dispenser at a Barclays branch in Enfield, north London, but this was not the ATM card and Pin system we know today. This machine was developed by John Shepherd-Barron, who was born in India, to Scottish parents, and lived much of his later life in Portmahomack in Ross-shire. So Shepherd-Barron became known as the "man who invented the cash machine" and not Goodfellow, the man who patented the system we use today.
Shepherd-Barron's did not use plastic cards, instead it used cheques that were impregnated with carbon 14, a mildly radioactive substance. The machine detected it, then matched the cheque against a Pin personal identification number. Shepherd-Barron worked for banknote manufacturer De La Rue, which never patented its machine. Before he died in , he told a BBC documentary that he didn't patent the idea because he did not want fraudsters knowing how the system worked. He also said that the chief executive of Barclays had been quick to say yes to the idea when they had discussed it after a couple of Martinis.
Shepherd-Barron then had to go back to his team and get them to develop his idea. However, it is Mr Goodfellow's plastic card and PIN which became the forerunner of the system we recognise today. In recent years, his claim to have been the real inventor of the cash machine has been recognised more widely.
Mr Goodfellow now does not like to talk about the years in which Mr Shepherd-Barron got all the credit but in a BBC documentary he said it "really does raise my blood pressure". They thought that was the way to go. Mr Goodfellow was working as development engineer for Glasgow firm Kelvin Hughes in the mids when he got involved in a project to design a machine that could dispense money to customers when banks were closed. He told BBC Scotland that the driving force for the move was unions putting pressure on banks to close on Saturday mornings.
He said most people worked during the week and could not get to the bank, which closed at 3pm on weekdays. Many people went to the bank on Saturday mornings but the unions were pressing for staff to work a five-day week. The banks wanted a way to give working people access to their money when they were closed.
Mr Goodfellow said: "The problem with cash machines was access. Eventually, IBM abandoned payment-technology systems entirely. Around this time, two Ohio-based companies, NCR and Diebold, were working on technology that would enable them to dominate the supply of cashpoints for the next two decades. Its aim was to unite Diebold's self-service technology with IBM's global distribution system. Seven years later, and in spite of growing sales, the joint venture ended: Diebold hadn't achieved the international market breakthrough it'd hoped for and IBM's returns fell short of its expectations, in part due to the growth in local processing architectures, which had invalidated IBM's strategy to link ATMs to its expensive mainframes.
The companies' innovations included customer-friendly video display units, programmable buttons alongside the screen, a shift toward dispensing cash horizontally which reduced jams , and expanded functionality, including money transfers and balance inquiries. But NCR and Diebold were not alone. Growth in the number of banks deploying ATMs across the world promoted an increase in the number of manufacturers: Honeywell in the U.
Large European banks also developed proprietary networks, numbering in the thousands of ATMs, which U. Despite innovations in modular manufacturing, speedier ways to identify delinquent accounts, and the associated reduction in service costs, however, ATMs remained a significant capital investment.
The use of dedicated telephone lines limited them to bank branches or high volume non-bank locations, such as busy train stations and big airports. This limitation finally lifted with the advent of digital telephony and the industry's adoption of the Windows operating system. These two seemingly simple modifications transformed the ATM, enabling remote diagnostics and integration with credit card clearance networks.
Still, not everything is rosy for the ATM industry. In a cost-reduction move in , for instance, Chilean banks reduced the size of their ATM fleets as well as the frequency of cash resupplies for existing machines while encouraging the use of government-sponsored cash remittance networks in mom-and-pop retail stores. This move led to public outcry and anti-bank campaigns on social media.
The success of mobile banking in Africa has also created doubt about the need to deploy ATMs in developing countries. Mobile banking and remittances—which alleviate the need for cash and bank branches in rural areas—offer the chance to increase financial inclusion in Africa, Asia, and Latin America while obviating the substantial investment required to install and maintain proprietary ATM networks.
Despite these advantages, the fate of mobile banking and remittances, for many developing countries, remains uncertain. From its humble and uncertain beginning nearly 50 years ago, the ATM has become pervasive. But it wasn't until the s, more than 15 years after the machine's invention, that the ATM's success was assured.
Today, we're asked for our PINs in libraries, on the Internet, and in every sort of retail store, for which debit cards have become the de facto currency.
The near-total global integration of ATM networks means that we can travel almost anywhere in the world with just a piece of plastic in our pocket, confident that we'll have access to cash in places as far afield as Hong Kong, Easter Island, Giza, Paris, and even Antarctica. Some machines now act as Internet kiosks, while others display an advertising by third parties or allow users to purchase minutes for their mobile phones.
Yet for all its digital innovations, the quick dispensing of physical cash remains the core, transformative function of the ATM. Skip to content Site Navigation The Atlantic. Popular Latest.
The Atlantic Crossword. And the name checks out: The could handle 5, transactions before needing to be restocked. It featured modular components that could be snapped in and out very quickly to minimize maintenance.
It was also based on completely new software and an electronics platform enabling connections to worldwide networks. By , there were , ATMs installed globally. And, the growth since then has been huge—both in the amount of installed ATMs and what they can do for banking customers. Once the ATM became an established and familiar part of the banking system, the next frontier of innovation was usability.
In the s, NCR played a big part in driving the channel forward with the introduction of color displays and FDK buttons. In the early s, ATMs got another big boost: growing the ability for consumers to make deposits cash and check anytime they wanted to, just like their access to cash. This added significant flexibility for customers—and FIs were able to move more transactions from the teller to the ATM. Today, people can make many more transactions at the ATM, from simple cash withdrawals and balance inquiries to opening an account and applying for a debit card.
And, as reported by the Economic Times , some ATMs offer even more unique services like paying income taxes, applying for personal loans and paying bills. Whereas previously some deployers were dissuaded by a perceived lack of reliability, or issues regarding integration or security, these concerns have now largely been assuaged. Sometimes, though, customers still wanted to be able to talk to a teller—without having to go to a branch.
Equally, FIs needed to do more than provide automation; they needed to enable customers to make more complex transactions outside of normal banking hours. Launched in , the ITM uses a two-way video link via a call center to provide face-to-face teller support to ATM customers.
NCR has an estimated 70 percent of all such machines globally. The benefits for customers include all the convenience and ease of using an ATM for nearly all of their banking services, plus they get the assistance they need from a teller without having to visit their bank. And, during the pandemic, that has been significant as FIs want to help their customers while having to close branches and operate social distantly.
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