“Only thing useful, Banks have invented so far is an ATM. Installing it 54 years ago, Banks have never closed again”

India born British Inventor John Shepherd-Barron of printing firm De La Rue, awarded an OBE in the 2005 New Year Honours, is credited with the invention of ATM. He was born in Meghalaya hospital in1925. The hospital has recently got an automated teller machine after 53 years of the first installation of such a cash dispenser globally. The ATM was installed at Dr H Gordon Roberts Hospital, which will turn 100 next year. "The teller machine was installed on August 7 after a petition was submitted to State Bank of India for setting up an ATM on the premises before the centennial celebrations of our facility next year," Medical Superintendent of the hospital Dr Broken Nongrum told. The access to an ATM in the facility will help patients and staffers immensely. "We are grateful to bank authorities for considering our request. The ATM is special as the inventor of the automated teller machine was born in this hospital 96 years ago," Nongrum said. It was rightly articulated in honour of the innovator that “One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man”

Historically the first ATM was set up on 27June 1967 on a street in Enfield, London at a branch of Barclays Bank, by a team led by Shepherd-Barron. The machine allowed customers to withdraw a maximum of GBP 10 at a time. On 2 September 1969, Chemical Bank installed the first ATM in the U.S. at its branch in Rockville Centre, New York. This ATM was also designed to dispense a fixed amount of cash when a user inserted a specially coded card. A Chemical Bank advertisement boasted "On Sept. 2 our bank will open at 9:00 and never close again” 

An ATM is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, cash withdrawals, deposits, funds transfers, balance inquiries, at any time without the need for direct interaction with bank staff. Using an ATM, customers can access their bank deposit and credit accounts to make a variety of banking transactions. ATMs can also 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 If the currency being withdrawn from the ATM is different from that in which the bank account is denominated, the money will be converted at the financial institution's exchange rate. Customers are identified by inserting a plastic ATM card, with authentication being by the customer entering a personal identification number (PIN), which must match the PIN stored in the chip on the card and institution's database. 

The social backdrop in different countries in the 1960s played a pivotal role in furthering the cause of ATMs. In the UK, Banking unions were putting unprecedented pressure on the banks to close on Saturdays. At the same time, “automation” was a buzzword that appealed to masses and was thought to save time and labor costs. Automating the teller process seemed to appease all the stakeholders, satisfying the customers and the banking unions, and driving innovation in the banking industry. In the US, the push for ATMs was motivated by the need to shorten banking hours, reduce congestion in bank branches, and cut labor costs. 

The prospect of attracting more customers with shiny new gadgetry appealed to the businessmen and opened the doors to ATMs. The advent of ATMs upgraded the field of banking and changed the way banks interacted with their customers. People began identifying themselves with the bank’s brand, rather than the individual branch. The ATM amplified the scope of banking, where the customer wasn’t tied to a branch or a human being, could access the bank 24/7, through machines, and later through mobiles and laptops. In 1960, an American named Luther George Simjian invented the Bankograph, a machine to deposit cash and checks. In the U.S., the deployment of the ATM was pioneered by Donald Wetzel, a Dallas-based engineer. 

In 1970, a British engineer, James Goodfellow, proposed the concept of a personal identification number (PIN), which automated verification of the identity of customers, thus marking a landmark moment in the growth of self-service banking. The U.S. witnessed a major surge in ATM numbers in 1977 when Citibank pledged more than $100 million for the installation of the machines across the city of New York. National Cash Register, a software and technology company in the U.S., launched the NCR Model 770, an easy-to-operate ATM that allowed the banks to offer services 24/7.  By 1984, the number of ATMs installed worldwide crossed 100,000. 

ATMs have become an integral part of daily life and status. Jokes have emerged, like, “ I joined a gym and said to the trainer, “I want to impress beautiful girls, which machine should I use?” He said, “Try the ATM outside.” Based on suction technology of counting currency, ATMs can not make any mistakes in counting.They always deliver exact amounts. Even though digital payment services are gaining popularity in the 21st century, cash is still preferred in most parts of the world for transactions. ATMs, bank branches, mobile banking, and internet banking are complementing each other in the foreseeable future. Estimates developed by ATMIA place the number of ATMs currently in use at 3 million units, or approximately one ATM per 3,000 people in the world. In India there are 240,000 ATMs averaging one ATM per 5625 Indians. Using the ATM simile, in a male dominated society, it is joked that there is no harm in treating a husband as an ATM machine when he treats his wife as washing machine, vacuum cleaner, dish washer, cook and maid.

Banks have been using thermal paper rolls to issue transaction receipts to customers. The sheets carry social messages. Taunted a cashed out customer “A small ATM room having two air conditioners, air cutter, huge glow sign, four tube lights working throughout the day, tells us not to print account slip to save environment”

Beginning this Diwali season from first October, Cash-out at any ATM of more than ten hours in a month will attract a flat penalty of ₹10,000 per ATM. In case of White Label ATMs (WLAs), the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA. Considering the high rentals of ATM cubicles and low level of hits to operate, the viability of ATMs has always been a challenge and a debatable issue. Will empty ATMs be able to absorb such a penalty ? Unless viability and security issues of ATMs are addressed, such a penalty will further reduce the numbers of ATMs in the country. 

We must remember that “ATM machine is like Love, only withdrawals make it empty”. 

(Mr. Hargovind Sachdev has over 39 years of banking experience having occupied senior positions in UCO Bank, United Bank of India, State Bank of Patiala, State Bank of Travancore & State Bank of India where he headed the Central European Credit Desk at Frankfurt, Germany from 2006 to 2011 covering 15 countries of Central Europe.)