ATMs. Historical background

Today, the concept of banking machine for dispensing cash or just the ATM closely associated with the concept of a payment card. This relationship is sustained over decades and helps us to access your account from virtually anywhere in the globe.

The first ATM was patented by Luther George Simpana in 1939 , the Device gave out cash, but could not deduct them from the account – this technical possibility did not yet exist. Simjan invited to try out the invention one of the major us banks, but after half a year bankers returned the car, saying that do not see it as necessary. The invention of Simpana 30 years forgotten and finalized only in the late 60's by engineer Don Wetzel.

21 Sep 1995,don Wetzel (co-owner of the patent for the ATM) gave an interview for the Museum of American history. The content of this interview used in this article.

After graduating from Loyola University in 1951 year, don Wetzel was hired at IBM in the computing center of collective use. At that time, very few organizations had their own computing centers, and the most common storage media were punch cards. Thus, don began his career as an operator perforating machine. And from 1959 to 1968 , the year of don Wetzel already worked as a commercial representative for IBM and was responsible for sales of IBM equipment in banks and other financial institutions. It was during this period was his acquaintance with banking technologies.

Don had the idea to create a terminal that could do 90% of the volume of work of the representative office of the Bank, and in 1968, the year he with this idea he went to work in the company Docutel to the position of Vice President for production planning. The work on creation of the terminal began with a study of the condition of the Bank branch infrastructure, because no one thought to install the terminal outside the office of the Bank. As a result of research the specialists of the company Docutel concluded that "automatic tellers" only in the head offices of the banks across the country will take at least 5 years.

Once you have a potential market, don Wetzel and his colleagues took over the technical implementation of the idea. At that time there was no such thing as a terminal of the Bank teller, since all the computers were used in banks for back-office functions. Hence, the first ATM was supposed to run in offline mode that did not quite satisfy the bankers, who did not understand how to give the money to the customer without verifying the availability of funds in the account.

Further that should activate the device? When Wetzel approached the solution to this problem, namely to use a magnetic strip to the required information, banks began to issue credit cards. But it was just plastic card, they did not have a magnetic strip or other media that can be used to activate the ATM. Moreover, the marking on the map suggested heat treatment plastic, which is not allowed to use the magnetic strip. Therefore, the first test card magnetic strip just pasted manually.

Work offline required the organization integrated in the ATM system of protection, which limited the number issued for one treatment of money. As at the time of issuance of the real money account balance was unknown, the restriction imposed on the number of calls per day, and the ATM each time gave the same amount.

In early 1969 the year the research results were presented to the Board of Directors of Recognition Equipment, which included the company Docutel. As a result of discussions, the Board of Directors of the Corporation voted for the allocation of targeted funding in the amount of $ 4 million.


Funny detail: the only member of the Board of Directors, expressed disapproval of the project was the banker. This was due to the mentality of the bankers of the time who believed: "We need to work with customers directly, people are not going to use any machines and we don't want them to do that. We want our clients came to the office of the Bank, and talked with us. So we can sell them additional services." But this is not true. Tellers are never sold additional services, their mentality was: "did You bring the check, in exchange for which I'll give you the money and if I work fast, you will be able to serve all customers in the queue and everyone will be happy."

After receiving funding Docutel started manufacturing of major components of the ATM reader, magnetic stripe card, dispenser of banknotes and the printer for printing receipt and journal tape.

The magnetic stripe reader was easy to find on the market. Problems arose with the mechanical parts of the dispenser, which did not want to work with the old bills. In Docutel on this problem was That Barnes, who later became the co-author of a patent for the ATM. Had some trouble with a coffee printer: the idea to print information about committed transactions in a special font of magnetic ink (MICR technology), allowing to automate the log processing in the Back office of the Bank.

When problems with the nodes of the ATM has been solved, experts Docutel returned to the developing technology of recording information on the magnetic stripe of the plastic card. This was developed for electronic module with "protection" cryptographic algorithm, which is mounted on the embosser in an additional node, which allowed automatically to encode magnetic stripe. Also developed the "personal" model embosser for expeditious reissuance of the card at the Bank's office in case the customer lost it or she didn't read in the machine.

Experts Docutel long to decide which enclosure to use the ATM and how it needs to be protected. As a result, for the construction of the hull took steel sheet thickness of 5/8 inch (approximately 1,6 cm). Autopsy of such a case would require an 8-hour work gas burner that is more than enough for ATM security, and would "appease" the bankers.

ATM was also designed heating system, which was built on command of a sensor mounted on the inner side of the front panel.

By the time the prototype of the ATM in it was provided for the control device and the individual nodes connected by wires. Wiring was so much that was worth to move or rotate the ATM, the relationship ended abruptly and had the whole day to look for the connection. Therefore, once the market appeared first microprocessors, George Chastain - engineer the company Docutel has developed the ATM-based microcomputer.

While there was work on the production of a prototype, don Menzel were looking for a place to install the first ATM. The Board of Directors Docutel offered to give the ATM to the test in one of the banks - the shareholders of the company. Don believed that Docutel has to sell the first ATM of the Bank that will be interested in developing the technology. In September 1969 he was awarded the first contract for the sale and installation of ATM on long island, in Chamical branch of the Bank. It was the street version of the ATM.

And only in 1973 a group of employees of the company Docutel led by Don Menzel received a patent for the ATM machine that gives out money at the request of the client using a plastic card with encoded a certain way with a magnetic strip.

At the start of
sales of ATMs in the company Docutel was not a marketing service and don Wetzel used his IBM-ovskie regard to interest bankers, whose reaction to the proposal to use the ATM was mixed. First bankers believed that personal communication between the client and Bank employees are better than machines second important role played by the amount of the initial investment, which consists of prices of ATM (18000 USD). plus the cost of installation, maintenance and advertising company. To support sales of the first Docutel ATMs specialists developed the scheme of return of devices, based on the possibility for the Bank to attract new customers by expanding services, namely, providing cash 24 hours a day, 7 days a week. The announcement, which gave Chemical Bank in the newspaper on the occasion of the installation of the first ATM machine, reads: "the branch of the Bank at such address will open its doors on September 3, 1969 at 9: 00 a.m. and never closes them." Soon Chemical Bank ordered more several ATMs at Docutel.

In 1973 , the year of don Wetzel left the company Docutel, tired of the hard work on the sale of ATMs and related frequent travel, and opened his own firm for the sale of Bank safes. The company has been a commercial success and lasted on the market for 18 years.


In 1978 , the year of don Wetzel decided back in the ATM business and founded the company called "Electronic Banking Systems (EBS), which advised the banks on the development of self-service systems. EBS was the first to install ATMs in supermarkets with the connection to processing centers, such as Cirrus. This initiative was so successful that in 1984 Docutel ... bought EBS and don Wetzel was again an employee of the company Docutel.

To the sale of EBS, the company Docutel don Wetzel in 1979 , he founded a third company "Autosig Systems Inc." (ASI), which supplies solutions for electronic signature verification. The company exists to this day and don Wetzel is Chairman of the Board of Directors.