Article

From punchcard to prestaging: 50 years of ATM innovation

Webinar explores the making -- and remaking -- of the ATM industry.

July 31, 2013 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Trying to determine who invented the ATM is as hopeless as trying to figure out who to credit for inventing motion pictures. Was it William Lincoln, who patented the zoopraxiscope in 1867? Thomas Edison, who came up with Kinetoscope in 1891? Louis Lumiere, who invented the Cinematographe in 1895? Yes.

"So, who was the inventor? I don't think that there is a single inventor," said Professor Bernardo Bátiz-Lazo of Bangor University. "There's really no one single person who was working in his or her garage and came up with this machine and took it to a bank and they said, 'Oh, great idea,' and then everybody else copied it."


An early NatWest Bank cash card

Bátiz-Lazo, who teaches business history and bank management at Bangor, was a guest presenter at this week's webinar, "The most important events (and surprises) in the ATM's history," presented by Pendum and ATM Marketplace.

He and Tom Harper, president of Networld Media Group — and current president of the ATM Industry Association — co-authored the book, "Cash Box: The Invention and Globalization of the ATM," an absorbing account of the 50-year history of contributions and controversies, strokes of genius and questionable business decisions that accompanied the development of one of the most important — and perhaps the most overlooked — co-inventions produced by the 20th-century financial services industry.

In a one-hour fireside-style presentation Harper and Bátiz-Lazo talked about some of the most surprising things they learned from their background research on Cash Box — and some of the signal events to influence the growth and probable future of the ATM.

A few of the co-authors' more surprising discoveries:


The Simjian Bankograph

How long the ideas of self-service and cashless technologies have been around — The Bankograph by Simjian was patented in 1959, Bátiz-Lazo said. "It was important because it was used as 'prior art' by all of the subsequent patents in cash machines."

Actually not a cash dispenser, the Bankograph was a deposit-taking machine that photographed deposited checks and provide the customer with a printed receipt. Sort of an early-'60s version of RDC — 40 or so years before the introduction of the smartphone.

The fact that cashless-ness is not inevitable — "We have pockets where a cashless society is trying to take root, such as Sweden, the Netherlands and France, but it's definitely not sweeping the globe," Harper said.

But, he said, while many people choose not to use cash as their primary payment instrument, they still carry it as a backup. "The key is that it represents choice and consumer freedom."

A few of their observations on the importance of understanding the history of the ATM:

"A better understanding of your past helps to articulate a more solid future," Bátiz-Lazo said. "Acknowledging the basic links and dynamics between bankers, engineers and customers in the design and development of the market and payment systems in general is very much a thing for today."

"I think history helps us understand where we are in our industry’s life cycle, and also where our individual businesses are," Harper said. "If you look at the lifecycle of any industry you see a bell curve, and many industries are mature and at the top of the curve or in decline and on the way down. Payphones would be way down in the trough in decline, whereas mobile phones are at the beginning trough."

Harper said it was important for industry members to ask themselves several questions about their business sector. Among them:

Is it hopelessly commoditized, or is there room for innovation?
How do you price your products & services?
Are they on the front end or back end of the sector’s lifecycle?
How long can you expect them to survive?
How are you dealing with new innovations such as mobile?

"I believe that we're at the beginning of a renewal of our industry as it's fueled by mobile," Harper said, adding that the industry was seeing "all kinds of convergence in the ATM and mobile channel," citing mobile prestaging, QR-code based transactions and texted receipts among others.

Harper said this convergence was the impetus for the development by Networld Media Group of the first ATM & Mobile Executive Summit to be held in September in Washington, D.C.

"It's really interesting to see how this convergence is changing the future of the industry," he said.

Surprisingly, not every innovator has the ability to envision change.

"The cinema is an invention without a future," said Louis Lumière, who is most often named as the father of the modern day movie-making business.

Fortunately, the world's ATM inventors have had a history of better foresight.

The full one-hour webinar, "The most important events (and surprises) in the ATM's history," is now available for replay.

Read more about ATM innovation.

photo: creativejuice

About Suzanne Cluckey

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.