ATM turns 50: How it’s altered our behavior
Expert: Consumers found gratification in self-service aspect.
Automated teller machines. Cash machines. In Britain, cashpoints.
ATMs, known for spitting out $20 bills (and imposing fees if you pick the wrong one), turn 50 years old this year. They’re ubiquitous — and possibly still a necessity, despite big changes in how people pay for things.
It was a radical move when Barclays installed cash machines in a London suburb in 1967. The utilitarian machine gave fixed amounts of money, using special vouchers — the magnetic-striped ATM card hadn’t been invented. There was no way for a customer to transfer money between accounts, and bank employees tabulated the transactions manually at the end of each day.
As the ATMs became familiar, though, they changed not only the banking industry but made people comfortable interacting with kiosks in exchange for goods. Now that means getting movie tickets and boarding passes, self-checkout at grocery stores, and online shopping that brings products to your door with a few clicks.
All are based on the idea that people can handle routine transactions without a teller or cashier.
“The ATM tapped into that innate force in people that gives gratification for doing a task on their own and it grew from there,” said Charles Kane, a professor at the MIT Sloan School of Management.
It was a radical concept at the time. The ATM wasn’t the first self-service device — vending machines and the automat had been popular earlier. But those dispensed items that people could hold in their hand.
Bernardo Batiz-Lazo, a business professor and ATM historian at Bangor University in Britain, said early users of automated tellers were often checking their balances twice: once to see how much was in their account, then again after withdrawing money to see if it registered.
“They were popular, but it took a long time to slowly convince customers to learn about ATMs and use them regularly,” BatizLazo said.
For the banking industry, ATMs meant banks could be in thousands of places at once, not just in branches, and earn billions of dollars in fees from non-customers. Banks used to staff dozens of tellers at each branch to handle routine transactions; now many staffers work on other tasks, such as sales or account maintenance.
The U.S. now has roughly 3 million cash machines, according to the ATM Industry Association. Most are not owned by banks, but by companies that install them at convenience stores, restaurants and bars in hopes of grabbing customers who don’t want to find a bank branch.
The wide acceptance of ATMs changed the types of cash Americans typically carry in the pocketbooks. Since ATMs became more widely available in the early 1980s, the $20 bill has regularly been the second-most printed bank note each year by the Bureau of Engraving and Printing. First place is still held by the $1 bill.
Even as people use cash less, and credit cards or mobile payments more often, the ATM isn’t going anywhere for a while. Devon Watson, vice president at ATM manufacturer Diebold Nixdorf, the world’s largest manufacturer of ATMs,says 85 percent of all transactions worldwide are still in cash.
Newer ATMs have more functions. They accept check deposits, transfer money between accounts, show a balance, pay a credit card or mortgage payment, or even sell you stamps.
And future ATMs will likely start selling products as well. Have a checking account? The ATM will ask you whether you want to open a brokerage account —much like tellers did.