History of Automatic Teller Machines or ATM

ATMs in Thailand

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An automatic teller machine or ATM allows a bank customer to conduct their banking transactions from almost every other ATM machine in the world. As is often the case with inventions, many inventors contribute to the history of an invention, as is the case with the ATM. Keep reading to learn about the many inventors behind the automatic teller machine or ATM.

Hole in the Wall

Luther Simjian came up with the idea of creating a "hole-in-the-wall machine" that would allow customers to make financial transactions. In 1939, Luther Simjian applied for 20 patents related to his ATM invention and field tested his ATM machine in what is now Citicorp. After six months, the bank reported that there was little demand for the new invention and discontinued its use.

Modern Prototypes

Some experts have the opinion that James Goodfellow of Scotland holds the earliest patent date of 1966 for a modern ATM, and John D White (also of Docutel) in the US is often credited with inventing the first free-standing ATM design. In 1967, John Shepherd-Barron invented and installed an ATM in a Barclays Bank in London. Don Wetzel invented an American made ATM in 1968. However, it wasn't until the mid to late 1980s that ATMs became part of mainstream banking.

Luther Simjian

Luther Simjian is best known for his invention of the Bankmatic automatic teller machine or ATM. Born in Turkey on January 28, 1905, he studied medicine at school but had a life-long passion for photography. Simjian's first big commercial invention was a self-posing and self-focusing portrait camera. The subject was able to look a mirror and see what the camera was seeing before the picture was taken.

Simjian also invented a flight speed indicator for airplanes, an automatic postage metering machine, a colored x-ray machine, and a teleprompter. Combining his knowledge of medicine and photography, he invented a way to project images from microscopes and methods of photographing specimens under water. He moved to New York in 1934 started his own company called Reflectone to further develop his inventions.

John Shepherd Barron

According to BBC News, the world's first ATM was installed in a branch of Barclays in Enfield, North London. John Shepherd Barron, who worked for the printing firm De La Rue was the chief inventor.

In a Barclays press release, the bank stated that comedy actor Reg Varney, star of TV sitcom "On the Buses", became the first person in the country to use a cash machine at Barclays Enfield on June 27, 1967. The ATMs were at that time called DACS for De La Rue Automatic Cash System. John Shepherd Barron was the managing director of De La Rue Instruments, the company which made the first ATMs.

At that time plastic ATM cards did not exist. John Shepherd Barron's ATM machine took checks that were impregnated with carbon 14, a slightly radioactive substance. The ATM machine would detect the carbon 14 mark and match it against a personal identification number (PIN). The idea of a PIN was thought up by John Shepherd Barron and refined by his wife Caroline, who changed John’s six-digit number to four as it was easier to remember.

John Shepherd Barron never patented his ATM invention instead he decided to try to keep his technology a trade secret. John Shepherd Barron stated that after consulting with Barclay's lawyers, "we were advised that applying for a patent would have involved disclosing the coding system, which in turn would have enabled criminals to work the code out."

In 1967, a bankers' conference was held in Miami with 2,000 members in attendance. John Shepherd Barron had just installed the first ATMs in England and was invited to talk at the conference. As a result, the first American order for a John Shepherd Barron ATM was placed. Six ATMs were installed at the First Pennsylvania Bank in Philadelphia. 

Don Wetzel

Don Wetzel was the co-patentee and chief conceptualist of an automated teller machine, an idea he said he thought of while waiting in line at a Dallas bank. At the time (1968) Don 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 Don Wetzel 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 first began in 1968, a working prototype came about in 1969 and Docutel was issued a patent in 1973. The first Don Wetzel ATM was installed in a New York-based Chemical Bank. Note: There are different claims to which bank had the first Don Wetzel ATM, I have used Don Wetzel's own reference.

Don Wetzel on the first ATM installed at the Rockville Center, New York Chemical Bank from a NMAH interview:

"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. 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."

ATM Cards

The first ATMs were off-line machines, meaning money was not automatically withdrawn from an account, as bank accounts were not then connected by a computer network to the ATM. Banks were at first very exclusive about who they gave ATM privileges to. Giving them only to credit card holders with good banking records.

Don Wetzel, Tom Barnes, and George Chastain developed the first ATM cards to have a magnetic strip and a personal ID number to get cash. ATM cards had to be different from credit cards (then without magnetic strips) so account information could be included.

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Your Citation
Bellis, Mary. "History of Automatic Teller Machines or ATM." ThoughtCo, Sep. 9, 2021, thoughtco.com/automatic-teller-machines-atm-1991236. Bellis, Mary. (2021, September 9). History of Automatic Teller Machines or ATM. Retrieved from https://www.thoughtco.com/automatic-teller-machines-atm-1991236 Bellis, Mary. "History of Automatic Teller Machines or ATM." ThoughtCo. https://www.thoughtco.com/automatic-teller-machines-atm-1991236 (accessed April 1, 2023).