UK Edition
The story behind the world's first cashpoint
The world’s first cash machine landed on a north London high street 50 years ago this week, transforming everyday banking for millions of people all over the globe.
On June 27 1967 the cash machine, installed outside a Barclays branch in Enfield, north London, was unveiled. Customers who needed to withdraw money no longer had to rely on bank cashiers, who would close the doors at 3.30pm.
Banks’ restricted opening hours at the time were what inspired John Shepherd-Barron, a British inventor and businessman who worked for De La Rue, the banknote printer, to design a machine that dispensed cash.
Mr Shepherd-Barron came up with the idea of the “automated teller machine” in 1965 after he arrived at his bank “one minute too late” to withdraw money. (Nicely conforming to the inventor stereotype, the idea came to him while he was taking a bath.)
“It struck me that there must be a way I could get my own money, anywhere in the world or the UK,” he was quoted as saying.
“I hit on the idea of a chocolate-bar dispenser, but replacing chocolate with cash.”
That same year Mr Shepherd-Barron bumped into the chief general manager of Barclays as he was sitting down to lunch. Mr Shepherd-Barron was then able to share his idea “over a pink gin”.
Two years later the first ATM was installed outside the Barclays branch in Enfield. It was the first of six machines he was commissioned to design.
Carole Greygoose was working in the branch when the machine was unveiled. She was just 16 when she started to work there in 1965, initially in the machine room and later in the cashiering department.
Miss Greygoose, now 68, said she didn’t think anyone realised “what a huge difference” the new machines would make to people’s lives.
The new cash machine was an instant hit, but Miss Greygoose said it wasn’t without “teething problems”.
Apparently it was so popular that it often ran out of money over the weekend, and the bank had a “few irate customers to console” on the Monday.
At the time she said everything was done manually, which was a “long, arduous process”.
She explained: “All cheques and credits were posted on to ledgers and then on to customers’ individual accounts. I remember the senior cashiers calculating the interest daily, by hand, on to enormous ledger sheets.
“Everything had to agree at the end of each day.”
She added: “I can remember having to stay at the branch, many times until 9pm, even if it was one penny wrong. Everyone from the manager down would stay and help out.”
Miss Greygoose worked at the Barclays branch for 30 years and saw the huge impact that cash machines had on the role of the cashiers, who became more focused on sales.
“With the increased sophistication of the ATMs, providing customers with their cash, their balances and all manner of other services, as well as the huge growth in internet banking, the role of the cashiers changed, with more emphasis on the range of bank services, including mortgages, savings accounts and loans,” she said.
How did the original cash machine work?
While the original ATM did offer convenience, customers could not ignore banking hours altogether.
Debit cards had yet to be invented, and customers had to get special vouchers from the bank, which were processed in the same way as cheques and debited to the customer’s account.
Each voucher was worth £10 and was valid for six months. Vouchers were issued only to “approved customers”, who were given a six-digit code known only to them and the branch manager.
An “unbreakable punch code” of the same numbers would be printed on the vouchers.
Customers would sign the voucher and place it in a drawer in the ATM. The machine would then test the “carbon-14” stripe on the voucher, which was a slightly radioactive material.
Customers were then asked to enter their code, which was checked against the one on the voucher. If the two matched, the cash was dispensed in £1 notes in another drawer.
Those who needed more than £10 could repeat the process with additional vouchers.
Now there are around 70,000 cashpoints in Britain. Many not only let customers take money out, but also allow them to deposit funds in their accounts, pay bills, top up mobile phones or transfer money to other people.
The future of (free) ATMs
About 53,000 of the country’s cash machines are free to use, while around 16,000 machines charge.
However, at the start of this year Telegraph Money reported that arguments between banks, building societies and members of the Link network, which runs the cash machines, about who pays to maintain Britain’s ATMs meant that free access to cash was under threat.
When the customer of one bank uses a cash machine operated by another, a payment of about 25p is made by the first bank to the second.
But problems arise when certain banks have large numbers of cardholders relative to the number of machines they operate. Banks can argue that the fee is too high and doesn’t take into account the nature of the actual ATMs being used; machines in rural areas or not at bank branches cost more.
If new funding arrangements are not agreed, more cash machines may start to charge. A working group established by Link members had two “constructive” meetings earlier in the year to discuss the ATM network.
Further meetings are being scheduled, but in the meantime a spokesman confirmed that there were no planned changes that would affect consumers.