Remembering the Man Who Gave us the ATM
Last Friday, the world put to rest the man who has been credited with the invention of the modern-day automated teller machine -- the ATM. Shepherd-Barron's creation forever changed the way consumers access money, and paved the way for new self-service technologies such as retail self-checkout and airline self-check-in, which would follow decades later.
Shepherd-Barron died on May 15 after a short illness. He was 84.
Shepherd-Barron's creation forever changed the way consumers access money.
I met Shepherd-Barron a few years back at an ATM Industry Association conference in Orlando, Fla. I found him to be not only fascinating, but down-to-Earth. The story of how he came up with the idea for a machine that would allow bank customers to access funds outside regular banking hours was like hearing the storyline of Doc's inspiration for the flux capacitor in "Back to the Future." Like Doc, Shepherd-Barron came up with the idea for 24/7 access to money while in the bathroom. Unlike Doc, no knocks to the head were involved.
"I remember being infuriated that I could not always get access to my money when I needed it, especially over weekends when banks were closed," Shepherd-Barron said in a 2004 interview with ATMIA chief executive Mike Lee. "I started thinking of a way of getting money around the clock."
Shepherd-Barron's idea pulled together his various experiences in the financial space. At the time he came up with the idea, Shepherd-Barron was working for De La Rue in the United Kingdom, where he started his career in the cash printing business. While at De La Rue, Shepherd-Barron also had experience in the company's armored car division and had been responsible for moving most of the cash in the U.K.
The Carbon 14 system, developed for using secure tokens at Shell gas stations by big commercial companies in exchange for filling tanks with fuel, also played a role, as Carbon 14 technology provided the security for the token. In the petrol business, the secure token was used in exchange for gas. Shepherd-Barron thought if the Carbon 14 system could be used in a token for gas, why couldn't it be injected into a secure paper check in exchange for cash?
In 1967, Barclay's of London launched the De La Rue Automatic Cash System. It took a year to develop and perfect the coding, which allowed a user to take out a compressed stack of 10 Â£1 notes. The bank and De La Rue developed six of the terminals on a trial basis. Later, 50 more machines were deployed.
In 2007, the ATM celebrated its 40th anniversary. Today, according to ATMIA, more than 1.8 million ATMs are deployed throughout the world.
In 1994, the Discovery Channel produced a documentary about the ATM's invention, saying it was the first original British idea since the invention of radar in 1937. The ATM also appears on a list compiled by the DaVinci Institute of the last century's top 10 money-related innovations.
The ATM has undergone a few changes since its first incarnation. While Shepherd-Barron's ATM did require a four-digit PIN, the security method used at all ATMs today was in January 1974 patented by Leon Stambler. The first networked ATM, which connected ATMs to outside banks, was created in 1968 by a Dallas-based automated baggage-handling specialist for Docutel named Don Wetzel.
Today, the ATM continues to evolve. The 2004 passage of the Check Clearing for the 21st Act, better known as Check 21, has enabled automated deposits at the ATM, giving ATMs the ability to do more than just dispense cash. And even more recently, banking institutions have seen a troubling rise in ATM fraud incidents. But the basic premise Shepherd-Barron introduced more than 40 years ago remains -- a way to offer consumers convenient and fast access to their funds. The world will forever owe Shepherd-Barron a debt of gratitude.