Historical Echoes: The Invention of the ATM–A Case of Multiple Independent Discovery?
Amazingly, something resembling a drive-through automated bank teller existed back in 1941 (twenty-six years before the invention of the true ATM, or automated teller machine). It was an ingenious curbside teller’s window, as described in this October 1941 Popular Science article, “Bank Gives Curb Service to Motorists with Novel ‘Teller-Vision’ Cage” (p. 63 for IE7 users).
This “machine” that resembled an automatic teller wasn’t really automatic—it had a living, red-blooded teller (to forestall robbery, prepare withdrawals, and push the buttons of a dumbwaiter)—but was indeed drive-through. However, this doesn’t mark the invention of the ATM, nor does there seem to be any contiguity of thought between this event and the invention of the true ATM. Much more sophisticated was an idea for an automated teller by Luther Simjian, a Turkish inventor in New York, who in 1939 developed an idea for a hole-in-the-wall machine, registering twenty patents. It was determined after a trial of the machine that there wasn’t enough demand to keep going with the idea.
The modern ATM was invented in two different places (England and the United States) at roughly the same time, as an about.com article explains. It may be considered a case of multiple independent discovery or multiple discovery. Or maybe not, if one considers that the underlying technology wasn’t the same (radioactive check versus magnetic strip). The British version was created by John Shepherd-Barron, and it debuted in 1967. This version wasn’t patented—Shepherd-Barron was advised by his company’s lawyers that revealing the coding system for PIN numbers, a requirement for the patent, would’ve allowed criminals to hack it.
A self-described geek blogger named Michael Breaux has posted a short video about the rolling out of the first U.S. ATM in Rockville Center, Long Island, in 1969. The video doesn’t mention the British version, only the U.S. version and its co-patentee Don Wetzel (the other two were Tom Barnes and George Chastain, both engineers), a Docutel employee formerly of IBM.
The story of the Don Wetzel’s invention of the ATM has been captured in an exciting, very thorough 1995 interview conducted by Dr. David K. Allison, curator at the National Museum of American History of the Smithsonian. From this interview, we’re enlightened about the many decisions surrounding this invention. One of the most interesting points is that the developers did research to determine the degree of need for such an invention well before they tackled its technical aspects:
David: By experience, you mean that you approached this, as you describe it, really from a functional perspective and not from a technical perspective at all. Do I understand that correctly?
Don: That’s correct.
David: That you sat down with your planners and looked at the market structure, the functionality. At what point did you begin looking at technical issues? When did that part of the discussion come in?
Don: Once we determined that the marketplace was large enough to warrant us getting into that market with this machine, then we got down to “well, what kind of machine should this be, and how will it work?” And that posed several problems for us.
Nowhere in the interview is there mention of any knowledge of the ATM’s appearance in England two years earlier. So, it’s difficult to determine if and to what extent there was any knowledge of the English version, although the Wikipedia ATM entry intimates otherwise: “After looking first hand at the experiences in Europe, in 1968 the networked ATM was pioneered in the U.S., in Dallas, Texas, by Donald Wetzel.” There’s no suggestion in the interview that there was any race or extreme competition going on, as compared with today’s giant tech companies. Although both Wetzel and Shepherd-Barron invented different ATMs in the sense of “cash dispensers,” it was Wetzel’s group that soon developed the networked ATM (the ATM “talks” to a person’s bank account in real time). Read the interview to find out about Don’s adventures with encryption, mini-computers, and magnetic tape.
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.
Amy Farber is a research librarian in the Federal Reserve Bank of New York’s Research and Statistics Group.