The Story of the ATM: From Obscurity to a Street Corner Near You

Photo caption: John Shepherd-Barron, World’s First ATM & The First Transaction, 1967

ATMs changed not only the face of banking but also the way we go about our daily lives. According to the ATM Industry Association, there are now more than 1.7 million installed worldwide with a new one being installed somewhere in the world every couple of minutes or so.

ATMs or Automated Teller Machines were invented by John Shepherd-Barron, a relatively little known Scotsman who sadly passed away in May this year. In 2005 He received an OBE (Order of the British Empire) in the New Year’s Honours list for services to banking as the “inventor of the automatic cash dispenser”.

Shepherd-Barron’s vision for 24/7 access to his funds via a cash dispenser was conceived one night in the bath, sparked by arriving too late at a banks and not being able to withdraw any money. But we can also thank John’s sweet tooth for being the ultimate muse for the humble ATM – Shepherd-Barron is said to have told the BBC that he was originally inspired by vending machines for chocolate!

“I remember being infuriated that I could not always get access to my money when I needed it, especially over weekends when banks were closed. I started thinking of a way of getting money around the clock.”

Here’s a quote about John Shepherd-Barron in an interview with Mike Lee, ATM Industry Association CEO, 2002:

John’s big break came when he asked Barclays Bank’s GM for 90 seconds of his time to share this new idea. His reply came from the GM after only 85 seconds: “If you can make this device you are speaking about, I will buy it right now.” A deal was signed shortly afterwards – develop six ATMs (originally called “De La Rue Automatic Cash System” or DACS) for trial, to be followed by 50 more machines once proven. As the saying goes, good things come to those who wait – it took almost one year to develop the machine and to make it work.

The first machine was established outside the Barclays Bank Enfield branch in North London back on 27th June 1967 – Shepherd-Barron’s dream had become a reality. Sadly due to the lack of patenting, the next cash-dispensing machine was produced by Chubb and deployed by Westminster Bank the very next week. It may have seemed like madness not to patent such a revolutionary idea, but there was a method to the madness. John was advised that applying for a patent would have involved disclosing the coding system. This would have in turn enabled criminals to work out the code resulting in potentially huge security breaches. To ensure the coding process was protected and kept out of the hands of criminals, they never went ahead with a patent.

Shepherd-Barron’s machines predated the plastic card & magnetic strip. Instead, the machines used special cheques impregnated with carbon-14, which was detached & matched again the Personal Identification Number (PIN) entered on the keypad. He dismissed the idea of PIN numbers with six digits when his wife said she wouldn’t be able to remember them. So that is why we have four digit PINs – it was the longest string of numbers his wife could remember easily!

The highs & lows of the ATM world:

1. The world’s most northerly installed ATM is located at Longyearbyen, Svalbard, Norway.
2. The world’s most southerly installed ATM is located at McMurdo Station, Antarctica.
3. The world’s highest installed ATM is located in Naghu County, Tibet (4,500 meters) by the Agricultural Bank of China (a fact disputed by India who claims to have the highest in Nathu La Pass, India installed by Union Bank of India which is 4,310 meters, so there is no real contest!)
4. The world’s lowest installed ATM is claimed by an independent grocery store at Ein Bokek, Dead Sea which is 421 meters below Sea Level (Mediterranean)

What’s in a name?

DACs & ATMs are both very functional terms – but there are plenty of colloquialisms surrounding this product:

In the UK, an ATM may be referred to as a Cashpoint after the Lloyds Bank ATM brand. The alternative term “Hole-In-The-Wall” came later & is from the Barclays Bank equivalent. (Cashpoint is my chosen turn of phrase).

In Scotland the term Cashline, based on the branding from RBS or Royal Bank of Scotland, has become a generic term for one.

In the Republic of Ireland, ATMs are commonly referred to as a Banklink, named after the Allied Irish Bank brand.

In Israel, ATMs are also commonly referred to as Kaspomat. This is actually a compound word meaning “automatic money” in Hebrew, named after the Bank Leumi & Israel Discount Bank brand of machines.

Other terms include Bancomat used in various countries in Europe and Russia; Multibanco after a registered trade mark, in Portugal & All Time Money in India. There is also the more generic terms of money machine, bank machine & cash machine which are not limited by geography.

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