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ATM
automatic teller machine

Editor: Cornelis Robat

USA 1968-1969

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inventors

wetzel_don2.jpg (7167 bytes)
pointerDon Wetzel
(3)

no picture:
pointerTom Barnes, chief
mechanical engineer;
pointerGeorge Chastain, electrical engineer.
pointerJack Gebhart, engineer
pointerJames Goodfellow
pointerLuther George Simjian
pointerJohn Shepherd-Barron's

papers & manuals

hardware

software

An automatic teller machine or ATM allows a bank customer to conduct their banking transactions from almost every other ATM machine in the world. Don Wetzel was the co-patentee and chief conceptualist of the automated teller machine, an idea he thought of while waiting in line at a Dallas bank. At the time (1968) Wetzel was the Vice President of Product Planning at Docutel, the company that developed automated baggage-handling equipment. The other two inventors listed on the patent were Tom Barnes, the chief mechanical engineer and George Chastain, the electrical engineer. It took five million dollars to develop the ATM. The concept of the ATM first began in 1968, a working prototype came about in 1969 and Docutel was issued a patent in 1973. The first working ATM was installed in a New York based Chemical Bank. (note(1): There are different claims to which bank had the first ATM, here is Don Wetzel's reference:

The first voucher based cash dispensing machine was installed in 1967 by Barclay's Bank in London.  Experts, however, do not consider this an ATM.  The first modern day ATM was introduced to consumers in 1969 by Chemical Bank.(2)

"No, it wasn't in a lobby, it was actually in the wall of the bank, out on the street. They put a canopy over it to protect it from the rain and the weather of all sorts. Unfortunately they put the canopy too high and the rain came under it. (laughing) One time we had water in the machine and we had to do some extensive repairs. It was a walkup on the outside of the bank. That was the first one. And it was a cash dispenser only, not a full ATM... We had a cash dispenser, and then the next version was going to be the total teller (created in 1971), which is the ATM we all know today -- takes deposits, transfers money from checking to savings, savings to checking, cash advances to your credit card, takes payments; things like that. So they didn't want just a cash dispenser alone." - Don Wetzel on the first ATM installed at the Rockville Center, New York Chemical Bank from a NMAH interview.

atm.jpg (17930 bytes)
Early model of an ATM on display at the Smithsonion Institute(3)

 

Jack Gebhart had the idea to put the magnetic stripe on the bankcard to carry the customer information. This information could then be read by a reader, also from Jack Gerbhart, which in its turn is connected to a computer. (4)

There is as usual a controversy.

Who invented the idea of an ATM? (6)

  • History shows it was Luther George Simjian to develop the idea in 1939, though he could not make a commercial success out of it (see timeline).
  • James Goodfellow in Scotland holds a patent dated of 1966 for a full service ATM.
  • But what about John Shepherd-Barron's machine installed outside a north London branch of Barclays Bank in 1967?
  • The free standing ATM from 1968? It were Don Witzel, Tom Barnes, George Chastain, Jack Gebhart, and John D. White for Docutel in the US.

Timeline

 

1939

pointerBank automation started as early as 1939 with the invention of the ATM by Luther George Simjian (1905-1997) from Turkish origin.

Simjian came up with the idea of creating a hole-in-the-wall machine that would allow customers to make financial transactions. The idea met skepticism but he persuaded what is now Citicorp to give it a trial. After six months, the bank reported that there was little demand. "It seems the only people using the machines were a small number of prostitutes and gamblers who didn't want to deal with tellers face to face," wrote Simjian. (4)

1960

pointerATM predecessor installed: New York's First National City Bank (now CitiBank) installs a Bankograph in several branch lobbies. The idea is for customers to pay utility bills and get receipts without having to see a teller.

 

1967

pointerCash dispensing machine at Barclay's Bank in London. June 27

On June 27 1967 De La Rue wins the race to unveil the first machine, drawing crowds to the unveiling.

delarue_crowd
picture courtesy De La Rue Ltd.

The concept is developed by John Shepherd- Barron. He came up with a self-service machine which dispenses paper currency on a 24/7 basis. The first of this type of machines will be installed outside a north London branch of Barclays Bank in 1967.
It uses paper vouchers bought from tellers. The machine is called the De La Rue Automatic Cash System, or DACS.(7)

1968

pointerThe concept of the ATM established by Wenzel.

pointerCard-eating: Barclays and a few other banks introduce a machine that encodes cash on plastic cards purchased from a teller. The problem is that the machine always eats the cards, and customers have to buy new cards if they want to make more transactions. (8)

1969

pointerFirst use of ATM magstripe cards: Docutel installs its Docuteller machine at New York's Chemical Bank. The installation marks the first use of magnetically encoded plastic.

omron 1969
picture courtesy Omron

Chemical Bank's ad campaign announces: "On Sept. 2, our bank will open at 9:00 and never close again!"
Other manufacturers get into the game, but Docutel is the first to apply for a patent. Docutel is later credited by the Smithsonian’s National Museum of American History as being the ATM’s inventor. But most people in the industry recognize Docutel’s first machine as the first modern magstripe machine.
Donald C. Wetzel is given credit for developing the Docutel machine, which is initially met with resistance from bankers. Bankers say they’re concerned about the machine’s cost, which is about $8,000 more annually than a human teller. The bankers also fear that customers won’t like having a machine handling their money. (8)


1971

pointerFirst true bank ATMs: Docutel introduces its Total Teller, the first true fully functioning bank ATM.

 

pointerOmron (Japan) installs the first On-line cash dispenser.

omron online cash disopenser
picture courtesy Omron Corp

1973

pointerDocutel rewarded a patent for the ATM.

pointerProliferation begins: By 1973, 2,000 ATMs — mostly from Docutel- are operating in the United States. They sell for about $30,000 each.(8)

pointer Diebold begins work on the development of its TABS 600 with plans for an off-line prototype. (8)

diebold 1973
Diebold TABS 500 picture courtesey: atmmarketplace.com

1974

pointerDiebold’s first TABS 500 machine, an off-line version, is installed at a bank in Atlanta.

Diebold develops the TABS 550, an on-line and off-line version. The flexibility of the machine makes it unique and more marketable to banks.
The TABS 600 also is developed.(8)

1977

pointerChungho ComNet Co., Ltd. begins developing Teller Machines for banks.

 

1978

pointerThe first IBM-compatible Diebold machine is installed at a bank in Indianapolis. (8)

 

1979

pointerChungho ComNet Co (Korea) begins selling Cash Dispensers

 

1983

pointerChungho ComNet Co (Korea) begins selling On-line Teller Machines. Machines like this now have a direct connection via telephone lines with the bank's mainframe computers. In later years this connection is regarded as too high risk open for fraud and the machines' records will only be updated once to several times a day.

 

1994

pointerICL, the IT services company, has designed the first cash dispenser (CD) with a bill paying facility. 

The new CD incorporates a barcode scanner, which allows customers to pay bills automatically from their bank accounts, as well for traditional cash withdrawals and to check account balances.
Banque du Caire, Egypt’s third largest bank, is the first organisation to adopt the new technology in a bid to reduce queues in branches and offer customers a more convenient service.  ICL will design and integrate 100 new cash dispensers for the bank in a deal worth £2.4million.
The first people to be able to use the service will be customers of an Egyptian national mobile phone network.  Their phone bills will incorporate a barcode holding details of the amount due, as well as their bank account number at the Banque du Caire. The customer simply sweeps the barcode over the scanner at the cashpoint, keys in their PIN number and the bill is paid.

 

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Footnotes & References

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