Automated teller machine

An NCR Personas 75-Series interior, multi-function ATM in the United States
Smaller indoor ATMs dispense money inside convenience stores and other busy areas, such as this off-premises Wincor Nixdorf mono-function ATM in Sweden.

An automated teller machine (ATM) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, transfer funds, or obtaining account information, at any time and without the need for direct interaction with bank staff.

ATMs are known by a variety of names, including automatic teller machine in the United States[1][2][3] (ATM, American, British, Australian, Malaysian, South African, Singaporean, Indian, Maldivian, Hiberno, Philippines and Sri Lankan English), often redundantly ATM machine, automated banking machine (ABM, Canadian English[4][5]). Although ABM is used in Canada, ATM is still very commonly used in Canada and many Canadian organization used ATM over ABM.[6][7][8] In British English, the terms cash point, cash machine, minibank (the official name of the Yorkshire bank ATMs), and "hole in the wall" are most widely used.[9] Other terms include cashline, nibank, tyme machine, cash dispenser, bankomat or bancomat. Many ATMs have a sign above them, indicating the name of the bank or organisation that owns the ATM, and possibly including the networks to which it can connect. In Canada, ABMs that are not operated by a financial institution are known as "white-label ABMs".

According to the ATM Industry Association (ATMIA),[10] there are now close to 3.5 million ATMs installed worldwide.[11] However, the use of ATMs in Australia is gradually declining – most notably in retail precincts.[12]

On most modern ATMs, customers are identified by inserting a plastic ATM card (or some other acceptable payment card) into the ATM, with authentication being by the customer entering a personal identification number (PIN), which must match the PIN stored in the chip on the card (if the card is so equipped), or in the issuing financial institution's database.

Using an ATM, customers can access their bank deposit or credit accounts in order to make a variety of financial transactions such as cash withdrawals, check balances, or credit mobile phones. ATMs can be used to withdraw cash in a foreign country. If the currency being withdrawn from the ATM is different from that in which the bank account is denominated, the money will be converted at the financial institution's exchange rate.[13]

History

An old Nixdorf ATM

The idea of out-of-hours cash distribution developed from bankers' needs in Asia (Japan), Europe (Sweden and the United Kingdom) and North America (the United States).[14][15][16] Little is known of the Japanese device other than that it was called "Computer Loan Machine" and supplied cash as a three-month loan at 5% p.a. after inserting a credit card. The device was operational in 1966.[17][18]

Adrian Ashfield invented the basic idea of a card combining the key and user's identity in February 1962. This was granted UK Patent 959,713 for "Access Controller" in June 1964 and assigned to W. S. Atkins & Partners who employed Ashfield. He was paid ten shillings for this, the standard sum for all patents. It was originally intended to dispense petrol but the patent covered all uses.

In the US patent record, Luther George Simjian has been credited with developing a "prior art device". Specifically his 132nd patent (US3079603), which was first filed on 30 June 1960 (and granted 26 February 1963). The roll-out of this machine, called Bankograph, was delayed by a couple of years, due in part to Simjian's Reflectone Electronics Inc. being acquired by Universal Match Corporation.[19] An experimental Bankograph was installed in New York City in 1961 by the City Bank of New York, but removed after six months due to the lack of customer acceptance. The Bankograph was an automated envelope deposit machine (accepting coins, cash and cheques) and did not have cash dispensing features.[20][21]

Actor Reg Varney using the world's first cash machine in Enfield Town, north London on 27 June 1967

It is widely accepted that the first cash machine was put into use by Barclays Bank in its Enfield Town branch in North London, United Kingdom, on 27 June 1967.[22] This machine was inaugurated by English comedy actor Reg Varney.[23] This instance of the invention is credited to the engineering team led by John Shepherd-Barron of printing firm De La Rue,[24] who was awarded an OBE in the 2005 New Year Honours.[25][26] Transactions were initiated by inserting paper cheques issued by a teller or cashier, marked with carbon-14 for machine readability and security, which in a later model were matched with a six-digit personal identification number (PIN).[24][27] Shepherd-Barron stated "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."[24]

The Barclays–De La Rue machine (called De La Rue Automatic Cash System or DACS)[28] beat the Swedish saving banks' and a company called Metior's machine (a device called Bankomat) by a mere nine days and Westminster Bank'sSmith IndustriesChubb system (called Chubb MD2) by a month.[29] The online version of the Swedish machine is listed to have been operational on 6 May 1968, while claiming to be the first online ATM in the world (ahead of a similar claim by IBM and Lloyds Bank in 1971).[30] The collaboration of a small start-up called Speytec and Midland Bank developed a fourth machine which was marketed after 1969 in Europe and the US by the Burroughs Corporation. The patent for this device (GB1329964) was filed in September 1969 (and granted in 1973) by John David Edwards, Leonard Perkins, John Henry Donald, Peter Lee Chappell, Sean Benjamin Newcombe, and Malcom David Roe.

Both the DACS and MD2 accepted only a single-use token or voucher which was retained by the machine, while the Speytec worked with a card with a magnetic stripe at the back. They used principles including Carbon-14 and low-coercivity magnetism in order to make fraud more difficult.

The idea of a PIN stored on the card was developed by a group of engineers working at Smiths Group on the Chubb MD2 in 1965 and which has been credited to James Goodfellow[31] (patent GB1197183 filed on 2 May 1966 with Anthony Davies). The essence of this system was that it enabled the verification of the customer with the debited account without human intervention. This patent is also the earliest instance of a complete "currency dispenser system" in the patent record. This patent was filed on 5 March 1968 in the US (US 3543904) and granted on 1 December 1970. It had a profound influence on the industry as a whole. Not only did future entrants into the cash dispenser market such as NCR Corporation and IBM licence Goodfellow's PIN system, but a number of later patents reference this patent as "Prior Art Device".[32]

Propagation

Devices designed by British (i.e. Chubb, De La Rue) and Swedish (i.e. Asea Meteor) quickly spread out. For example, given its link with Barclays, 'Scotcash' brand. Customers were given personal code numbers to activate the machines, similar to the modern PIN. They were also supplied with £10 vouchers. These were fed into the machine, and the corresponding amount debited from the customer's account.

A Chubb-made ATM appeared in Sydney in 1969. This was the first ATM installed in Australia. The machine only dispensed $25 at a time and the bank card itself would be mailed to the user after the bank had processed the withdrawal.

1969 ABC news report on the introduction of ATMs in Sydney, Australia. People could only receive AUS $25 at a time and the bank card was sent back to the user at a later date. This was a Chubb machine

Asea Metior's Bankomat was the first ATM installed in Spain on January 9, 1969, in downtown Madrid by Banesto. This device dispensed 1,000 peseta bills (1 to 5 max). Each user had to introduce a security personal key using a combination of the ten numeric buttons.[33] In March of the same year an ad with the instructions to use the Bancomat was published in the same newspaper.[34]

Docutel in the United States (1969)

After looking firsthand at the experiences in Europe, in 1968 the ATM was pioneered in the U.S. by Donald Wetzel, who was a department head at a company called Docutel.[26] Docutel was a subsidiary of Recognition Equipment Inc of Dallas, Texas, which was producing optical scanning equipment and had instructed Docutel to explore automated baggage handling and automated gasoline pumps.[35]

On September 2, 1969, Chemical Bank installed the first ATM in the U.S. at its branch in Rockville Centre, New York. The first ATMs were designed to dispense a fixed amount of cash when a user inserted a specially coded card.[36] A Chemical Bank advertisement boasted "On Sept. 2 our bank will open at 9:00 and never close again."[37] Chemical's ATM, initially known as a Docuteller was designed by Donald Wetzel and his company Docutel. Chemical executives were initially hesitant about the electronic banking transition given the high cost of the early machines. Additionally, executives were concerned that customers would resist having machines handling their money.[38] In 1995, the Smithsonian National Museum of American History recognised Docutel and Wetzel as the inventors of the networked ATM.[39]

By 1974, Docutel had acquired 70 percent of the U.S. market; but as a result of the early 1970s worldwide recession and its reliance on a single product line, Docutel lost its independence and was forced to merge with the U.S. subsidiary of Olivetti.[citation needed]

Wetzel was recognised by the United States Patent Office as having invented the ATM in the form of U.S. Patent # 3,761,682; the application had been filed in October 1971 and the patent was granted in 1973. However, the U.S. patent record cites at least three previous applications from Docutel, all relevant to the development of the ATM and where Wetzel does not figure, namely US Patent # 3,662,343, U.S. Patent # 3651976 and U.S. Patent # 3,68,569. These patents are all credited to Kenneth S. Goldstein, MR Karecki, TR Barnes, GR Chastian and John D. White.

Continued improvements

The first modern ATM was an IBM 2984 and came into use at Lloyds Bank, High Street, Brentwood, Essex, the UK in December 1972. The IBM 2984 was designed at the request of Lloyds Bank. The 2984 Cash Issuing Terminal was the first true ATM, similar in function to today's machines and named by Lloyds Bank: Cashpoint. Cashpoint is still a registered trademark of Lloyds Banking Group in the UK but is often used as a generic trademark to refer to ATMs of all UK banks. All were online and issued a variable amount which was immediately deducted from the account. A small number of 2984s were supplied to a U.S. bank. A couple of well known historical models of ATMs include the IBM 3614, IBM 3624 and 473x series, Diebold 10xx and TABS 9000 series, NCR 1780 and earlier NCR 770 series.

The first switching system to enable shared automated teller machines between banks went into production operation on February 3, 1979, in Denver, Colorado, in an effort by Colorado National Bank of Denver and Kranzley and Company of Cherry Hill, New Jersey.[40]

The newest ATM at Royal Bank of Scotland allows customers to withdraw cash up to £130 without a card by inputting a six-digit code requested through their smartphones.[41]

Other Languages
Afrikaans: Kitsbank
አማርኛ: ኤቲኤም
العربية: صراف آلي
অসমীয়া: এ টি এম
azərbaycanca: ATM (Bank)
беларуская: Банкамат
български: Банкомат
čeština: Bankomat
Deutsch: Geldautomat
Esperanto: Bankaŭtomato
فارسی: خودپرداز
հայերեն: Բանկոմատ
hrvatski: Bankomat
Bahasa Indonesia: ATM
interlingua: Cassero automatic
íslenska: Hraðbanki
עברית: כספומט
Basa Jawa: ATM
ಕನ್ನಡ: ಎಟಿಎಂ
latviešu: Bankas automāts
Lëtzebuergesch: Bankomat
lietuvių: Bankomatas
magyar: Bankautomata
македонски: Банкомат
मराठी: एटीएम
Nederlands: Geldautomaat
norsk: Minibank
norsk nynorsk: Minibank
олык марий: Банкомат
ਪੰਜਾਬੀ: ਏ. ਟੀ. ਐੱਮ.
polski: Bankomat
português: Caixa eletrônico
română: Bancomat
русский: Банкомат
саха тыла: Банкомаат
Simple English: Automated teller machine
slovenčina: Bankomat
slovenščina: Bankomat
српски / srpski: Банкомат
srpskohrvatski / српскохрватски: Bankomat
svenska: Uttagsautomat
тоҷикӣ: Банкомат
Türkçe: ATM (makine)
українська: Банкомат
vèneto: Bancomat
粵語: 提款機