On This Day

ATM, first atm, banking machine
Associated Press
A woman in England uses an ATM in 1968.

On This Day: First Automatic Teller Machine in US Opened

September 02, 2011 06:00 AM
by findingDulcinea Staff
On Sept. 2, 1969, a Chemical Bank branch in Rockville Centre, N.Y., opened its first automatic teller machine (ATM) to the public. The machine, possibly the first ATM ever developed, inspired the proliferation of ATMs over the next four decades.

Rockville Centre ATM Opened to Public

Don Wetzel, an employee at the Texas-based baggage-handling technology company called Docutel, was waiting in line at the bank one day in 1968 when he got an idea for a machine that could perform the functions of a bank teller.

“Golly, all the teller does is cash checks, take deposits, answer questions like ‘What’s my balance?’ and transfer money between accounts,” Wetzel told Fortune magazine in 2004. “Wow, I think we could build a machine that could do that!”

Wetzel received $4 million from Docutel to pursue his idea. Within a year, Wetzel and a team of engineers had developed most of the technology needed to fulfill his vision: a magnetic swipe card that stored customer information and a machine that provided cash and recorded transactions.

Chemical Bank agreed to purchase the first of Wetzel’s machines and install it at its Rockville Centre, N.Y., branch. It was placed in the wall of the bank, facing the street and under a canopy. It ran an ad in August 1969 declaring, “On Sept. 2, our bank will open at 9:00 and never close again!”

In a 1995 interview with the National Museum of American History, Wetzel noted that “it was a cash dispenser only, not a full ATM.” It was not networked, and thus relied on the honor system, trusting customers not to withdraw more than their accounts held. The most trustworthy customers were granted the ability to withdraw as much as $50 three times a day, while some customers weren’t even issued cards.

Customers responded well to the new machine, and Chemical Bank ordered more. The machine only had a few glitches; the worst, Wetzel told NMAH, was that “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.”

Wetzel and Docutel received a patent for his invention, and in 1971 they unveiled the “Total Teller, the first true full-function bank ATM,” according to International Merchant Services. Despite the exorbitant cost of installing ATMs, other banks soon began developing their own and they spread quickly through the ’70s.

Who Really Invented the ATM?

Wetzel is considered the inventor of the ATM largely because others followed his design. Others, however, developed similar machines before he did. In 1939, Turkish immigrant Luther Simjian began developing a banking machine, called the Bankograph, that was tested in 1960 by New York’s First National City Bank. The experiment was abandoned after six months when the bank determined it was only popular with “gamblers and prostitutes,” according to the Simjian.

In England, John Shepherd-Barron is widely accepted to be the inventor of the ATM. Installed in 1967 in the London borough of Enfield, his machine would dispense cash to bank customers who entered a four-digit PIN number and inserted a paper voucher.

Do We Still Need ATMs?

By 1971, ATM machines could check balances and accept deposits as well as withdrawals. Today there are more than 400,000 ATMs in the United States and more than 1.7 million worldwide.

Just like any technology, the ATM is always evolving. In Europe, ATMs also dispense minutes and ring tones for cell phones, plane tickets, flowers and more. World travelers often visit ATM machines instead of exchange counters to convert their money to local currency.

In a time when the swipe of the debit card can buy anything from a stick of butter to a Toyota Prius, some wonder about the future of cash, and in turn, the future of a machine designed for cash transactions.

How the ATM Works

HowStuffWorks explains the basic science behind ATMs. ATMs are connected to banks by modems or high-speed data networks. When a customer inserts the magnetic-stripe card, a reader interprets the data and communicates with the bank via an encrypted message to verify the customer’s identity and check the account balance. The machine then completes the transaction by either accepting the deposit or dispensing cash and by printing a receipt.

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