ATMs still paying off 50 years after their creation
Pat O’Brien is a longtime banker who has experienced perpetual change. One of the best innovations, in his mind, is the automated teller machine.
The ATM, to him, could stand for All Things Marvelous.
“It truly has been a revolution in the financial services industry,” said O’Brien, president of CB Financial Services Inc. and its subsidiary, Community Bank.
“The ATM has made accessibility to not only cash, but other financial services at retail sites or off-hours at a bank. It has taken what was basically a face-to-face financial transaction and made it more costumer-centric and more convenient.”
Then he ticked off some of those conveniences: check and cash deposits; fund transfers; loan payments; balance inquiries. All possible 24/7, no need to enter a branch, no long lines.
The noble, necessary automated teller machine turned 50 on June 27.
ATMs gained global prominence in the 1980s, starting not as a multi-functional plastic card with a magnetic strip, but a slip of paper with a teeny amount of carbon 14 – a minimally radioactive substance – that had a pattern printed on it, used solely for cash withdrawals.
It evolved into a source of millions of dollars for millions of people, and a groundbreaking force in finance.
Some say ATM usage is diminishing, but statistics indicate otherwise. There are more than 3 million ATMs around the world, handling more than 200 types of transactions, according to the website atmia.com. About 11.3 million transactions are made each hour, with the equivalent of $420,000 U.S. dollars withdrawn every minute.
“We’re still seeing records on the amount of cash we dispense from ATMs,” said Ken Justice, senior vice president/ATM executive with PNC Bank. “We’re excited about the success the ATM has had and value what it has provided to customers.
“We think it still has a lot of exciting life in it.”
There also are ATMs in Antarctica and regions north of the Arctic Circle. Talk about cold cash.
More than 420,000 of these machines operate in the U.S., totaling about 3.2 million transactions a year, according to the U.S. Government Accountability Office.
The ATM made its American debut Sept. 2, 1969, in the Long Island community of Rockville Center, N.Y. Chemical Bank installed what was known then as Docuteller.
It could not be determined where ATMs first opened for business in Washington and Greene counties, or in Southwestern Pennsylvania for that matter. Alan Aldinger, a spokesman for PNC Bank, said a forerunner of his company, Pittsburgh National Bank, launched one of the region’s earliest ATMs – March 1974 at its St. Clair branch in Upper St. Clair.
Dollar Savings Bank, now Dollar Bank, installed its first in 1977.
Back to that alleged debut. Legend has it – and this may only be legend – that John Shepherd-Barron, a Scotsman, devised the concept while bathing on a Saturday afternoon. He couldn’t get to his bank branch before it closed that day and decided there had to be a way to withdraw money at any time, without a teller’s assistance, without customer lines.
An engineer, Shepherd-Barron pitched his idea to Barclays bank, which introduced the ATM to the world June 27, 1967, at a branch outside London. A plaque outside the building attests to that slice of history.
Or non-history.
That account has been disputed in several quarters, most notably by a university professor from Wales. “Absolutely rubbish,” Bernardo Batiz-Lazo said in an article in smithsonian.com.
He teaches business history and bank management and is co-author of a book chronicling the history of the ATM. Batiz-Lazo said banks, before Shepherd-Barron pushed his idea, had been seeking ways to automate some customer services, and at least two groups were developing a cash-dispensing device the same time as the Scotsman.
The professor casts even further doubt, saying there is evidence that a cash machine appeared briefly in Japan – before the one at Barclays.
But whether this golden machine is legitimately marking its golden anniversary today doesn’t matter. This is a good time to celebrate the ever-evolving, much-beloved ATM.