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History of the Automatic Teller
XopherMV writes "The line was long and slow, and he became increasingly irritated as his lunch hour dribbled away. All at once, he had a flash of inspiration. 'Golly, all the teller does is cash checks, take deposits, answer questions like "What's my balance?" and transfer money between accounts,' recalls Wetzel, now 75 and still living in Dallas with his wife. 'Wow, I think we could build a machine that could do that!' And with a $4 million go-ahead from Docutel's parent company, that's exactly what he and his engineers did. Read more about the story of the ATM."
The Money Machines
The humble ATM revolutionized the way we deal with money and turned global commerce into a 24/7 affair. You can thank a Texan named Don Wetzel--and the blizzard of 1978.
Chemical Bank's ad campaign announced the start of the revolution in 1969: "On Sept. 2, our bank will open at 9:00 and never close again!" On that day at the Rockville Centre branch at 10 North Village Avenue on Long Island, customers who possessed plastic cards with magnetic stripes no longer had to wait in line for a teller to cash their checks. They could access their money 24 hours a day, seven days a week, through a machine built into a wall on the street.
Three hundred seventy-one thousand automated teller machines later, it's fair to say the revolution has been won. These days you can find ATMs not only in malls and airports but also in McDonald's and tiny bodegas. There's one on the South Rim of the Grand Canyon. There are some above the Arctic Circle. If Queen Elizabeth needs some pocket change to tip the royal ushers, there's an ATM at Buckingham Palace. There is even one, for some reason, at the McMurdo Station on Antarctica. Apparently, says Robert Mahoney, chairman of the Federal Reserve Bank of Cleveland and former CEO of Diebold, one of the largest American firms that make the machines, "even the penguins use ATMs." In short, there's one ATM for every 284 American households.
Cheapskates beware: You no longer have an excuse for not having cash in your pocket. For spendthrifts, likewise, ATMs have become a ubiquitous temptation--and one we give in to all the time, if you believe the numbers. Nearly 11 billion transactions are conducted via ATM each year, dispensing some $670 billion. That's up from $165 billion in 1985, according to Tremont Capital Group.
For all the talk about soaring credit card debt, clearly we love the feel of cold hard cash in our hands as much as plastic. So much so that we're willing to pay for those quickie stops at the ATM with often usurious fees--usually about $1.50 each time we grudgingly press the "I Accept" button on a cash machine outside our bank's network. Such surcharges and other fees add up to a $4-billion-a-year business, according to Dove Consulting, which has kept tabs on the industry for the past 20 years. That's a nice chunk of change to pay for the privilege of accessing our own money.
What you might find truly surprising, however, is that as a rule, large banks actually lose money on these moneymakers--at a rate of about $250 a month per machine. They are, ironically, loss leaders, since banks don't generally charge their own customers if they use the banks' machines. At Bank of America, for example, whose collection of some 16,000 machines is the largest among the nation's financial institutions, 85% of all ATM transactions are conducted by BofA's customers--about half of whom keep their business with the bank, they say, for just that reason. Wells Fargo has come to much the same conclusion. "If you're looking at it from a pure accounting perspective, it looks like you're losing money," says Jonathan Velline, who heads up ATM banking for the San Francisco-based bank. "But the truth is, if I didn't have ATMs, I wouldn't have customers."
That's essentially what a Visa survey last fall concluded when it showed that 92% of respondents considered convenient ATM access a critical factor in choosing a bank. Or take the Harris Interactive survey, which found that a healthy majority of respondents considered ATM access more essential than e-mail access. U.S. Bancorp is so convinced of the "come hither" lure of the cash machine that it drives its mobile ATMs in parades and dresses up employees as cash dispensers to mingle at local fairs.
It is easy, in the modern era of easy money, to forget just how strange it was three-plus decades ago for Americans to interact this way with machines. People were used to asking for their hard-earned bucks from a human being behind a bank window. They wanted to see, with their very own eyes, eac
NumB http://www.engvig.net
From the article:
What you might find truly surprising, however, is that as a rule, large banks actually lose money on these moneymakers
Oh, poor banks! They have to pay for cash machines and they don't profit from them!
The banks have to have cash machines, if they didn't then they would lose lots of customers to the banks that did have them.
So, if they are charging customers from other banks, that money is profit, since they would have to have the machines for their existing customers anyway.