Six weeks after landing men on the moon (see here), Americans take another giant leap with the nation’s first cash-spewing automated teller machine.
The Docuteller machine was installed in a wall of the Chemical Bank in Rockville Centre, New York. It marked the first time Americans could withdraw cash with reusable, magnetically coded cards. A bank advertisement announced “On Sept. 2, our bank will open at 9:00 and never close again!”
Don Wetzel, an executive at Docutel, a Dallas company that developed automated baggage-handling equipment, is generally credited as coming up with the idea for the modern ATM. His inspiration came while he stood in a bank line. Previous automated bank machines had allowed customers to make transactions only after purchasing a single-use voucher or card from a teller.
The new device was the first in the United States to dispense cash using a mag-stripe card that didn’t require teller intervention. But the mag-stripe machines couldn’t receive deposits or transfer money between accounts until the 1971 Total Teller. The ATM freed customers from the tyranny of banking hours, giving them access to dough 24-7. Because early ATMs were offline, a bank couldn’t check a customer’s balance to see if there was enough money to cover a withdrawal. So the banks imposed a $150 daily limit for ATM withdrawals.
Bank execs initially worried that customers wouldn’t like the machines or that reducing face-to-face interaction would make it harder to sell them other services. But customers embraced ATMs, which eventually let banks cut costs, lay off tellers, and, of course, charge outrageous user fees.
But with the machines’ ubiquity came security issues: hackers and scammers have kept banks on the defensive with ever more sophisticated schemes to steal cash through ATMs. Automated holdups, you might say.—KZ