The ATM is a computerized machine that’s designed to dispense cash to customers without having to require the teller’s assistance or any other human interaction. These ATM machines are found in convenient locations like malls, bank outlets, hospitals, and other places with high foot traffic. Their advent into our lives have allowed us to skip the long lines at the banks and allowing us access to our bank accounts when needed.
The ATM or Automated Teller Machine has become an important appliance in our life, mainly because it helps us avoid the long lines at the bank. It also gives us access to our savings 24/7, which is good in cases of emergencies. There are also some ATMs that allow us to deposit money straight into our account, which is also convenient because we don’t have to go to the bank to deposit. The money is credited right away into our account.
But how much do you know about the ATM? Did you know who invented it or when it was invented? Do you know the current issues that plague the ATM? What’s the future of the ATM going to be like? In this article, we are going to tackle the past, present, and future of the ATM.
The past – where it all started
Believe it or not, there are several people that can be credited to the invention of the ATM. It has been a debatable issue as to who holds the earliest patent for the ATM machine. This debate is divided into two groups: Luther Simjan and James Goodfellow.
- Luther Simjan was able to create a prototype of a not-so-successful ATM in 1937.
- ames Goodfellow from Scotland holds the earliest patent for the modern ATM in 1966.
There have also been countless debates as to the correct timeline of the invention of the ATM. After an astounding research done by Invention and Technology Magazine, the writers managed to create a report based on the timeline of the invention of the ATM.
In 1960, the first predecessor of the ATM was installed in the New York’s First National City Bank (now known as CitiBank). The ATM came in the form of a Bankograph and was installed in several branch lobbies, with the main concept of this machine allowing people to pay utility bills and get a receipt without going to a teller.
In 1967, the installation of the first Cash Dispenser was done in a Barclays Bank branch near London, which was the first cash dispenser in the world. It was made by De La Rue Instruments and this machine dispensed paper vouchers bought from tellers in advance. The machine was dubbed as the De La Rue Automatic Cash System or DACS. According to an interview with the inventor in 2002, the paper vouchers were actually checks impregnated with Carbon 14.
In 1968, the first card-eating machine was introduced. A few banks like Barclays introduced a machine that encoded cash on plastic cards that were purchased from the teller. This was a problem because the machine would literally eat the card and the customer had to buy another one from the teller for another transaction.
1969, people used the first ATM magstripe cards. Docutel installed its first Docuteller machine at the New York’s Chemical Bank and the first documented use of a car d made of magnetically encoded plastic. Their ad campaign ran “On September 3, 1969, our branch will open its doors at 9:00 a.m. and we’ll never close again!” While other manufacturers tried to get into the industry, Docutel was able to get a patent and now credited by the Smithsonian Museum as the inventor of the ATM and Donald C. Wetzel is credited for inventing the machine for Docutel.
In 1971, the first true ATMs came into existence under the guise of Docutel’s Total Teller, which performed the first full function bank ATM. 2 years later, there were already 2000 ATMs, mostly from Docutel and Diebold, and sold for about $30,000 each.
By 1974, the first online ATM was introduced and led to the modern day networks that we are now working with.
The present – Security issues and threats of the ATM industry and the users
Today, there are more than 2 million ATMs worldwide and an estimated 3 million by the year 2015. Data theft is the biggest threat of the ATM industry, with ATM skimming accounts account for 30% of all data theft. That’s roughly a $350,000 worth of fraud every day or close to a billion dollars every year. The ATM industry continues to address these certain issues that plague decommissioned ATMs. They urge ATM deployers to exercise caution when disposing the machine. According to several media reports, criminals are hunting for unused or discarded ATMs in the junkyard. These old ATMs contain card data, which the criminals can study to improve their skimming techniques. The faces of these old ATMs can be used to mould covers for the skimming device.
Skimming occurs in almost every part of the world, or countries with a mature network of ATMs, POS, and self-service terminals that use magnetic stripe credit cards or debit cards. Skimming usually involves a fake interface or keypad that records or logs the keypress of the user. This means that account numbers and PINs are acquired by the criminals and then used to drain the money from the account.
Other security issues that plague the ATM industry involve the buying of functioning old ATM units and installing them in places with high foot traffic. These ATMs can be purchased from eBay or Craigslist. The used ATMs are then powered by a car battery or plugged into a nearby outlet without anyone the wiser.
ATM hacking is also one big security threat, especially for those who like to shop online. Hackers attempt to create or replicate an online shopping site, down to the last detail and function. The replicated website would contain a keylogger software which records the keypresses of the user, as well as phish for other information like address, account number, and even credit card details.
The most threatening issue would be physical robbery. Some criminals wait and stalk nearby ATMs and rob people just as they’re about to withdraw money. Usually done at knife or gunpoint, the victim is then forced to withdraw all his or her money.
The ATM industry is advising all ATM manufacturers and users to be vigilant of these criminal actions at all times. Most banks have already created several advisories on how to detect skimming devices and how to protect one’s self from being robbed at gunpoint. Some ATMs have devised a reverse PIN where users input their pin in reverse (if PIN is 1234, reverse is 4321). This would then give out a silent alarm to the police station that there’s danger in a particular ATM location.
The future – Superior ATMs can do more
As mentioned earlier, more than 3 million ATM machines will be operational by the year 2015. According to a 2011 Global Industry Analysts Inc. Report, the future looks bright for the ATM industry. An estimated growth of 1.6 million operational ATMs is projected by the year 2017. Along with this growth comes the rumour of ATMs with superior capabilities, but what are these “SUPERIOR CAPABILITIES”?
David Albertazzi, senior analyst and ATM expert with Aite Group, said that ATM executives have worked hard over the years in getting machines from different banks to work together, mainly because of the mergers and consolidations that take place. He predicts that ATM companies will focus on placing machines that deliver personal messages to customers about their accounts, along with another array of services.
Albertazzi also stresses that the core function of the ATM will always be cash withdrawal and deposit backed by a 24/7 banking concept. This concept would then be backed by our technological advancements in mobile communication and personal computing.
Other predictions also focused on ATMs being converted into a payment terminal for insurance companies and developing mobile phone access to your ATM. However, the latter proved to be unavailable a couple of years ago, but a bank in Johannesburg was able to allow customers to make ATM withdrawals from their mobile phones.
Other future developments of the ATM include fund transfers, prepaid card top-ups, software application downloads, cellphone airtime, bill payments, and ticket purchase.
As mobile phones continue to be a prevalent gadget used by a lot of ATM users, manufacturers can expect their consumers to let mobile phones play a huge role when it comes to accessing their ATMs in the near future. As the 4G technology continues to improve, manufacturers will continue to consider it as an indispensable ATM feature. We may even enjoy wireless transactions from ATM machines via the EPOS systems in various retail outlets.
10 to 20 years from now, we can definitely expect the ATM machine to grow in both form and function. We will be able to perform tasks like booking reservations, paying for tickets, or even pay other bank bills.