U.S. ATM inventor celebrates its 50th anniversary
HEMPSTEAD, N.Y. — Donald Wetzel has been listening to pundits predict the end of cash for more than 50 years.
“It was in 1967 when some of the consultants in the financial industry predicted that we would have a nearly cashless society in 10 years,” he said.
But just two years later, Wetzel invented a machine that gave the U.S. population easier access to cash: the credit card automatic currency dispenser. Today, it’s better known as the automated teller machine.
While a number of customers increasingly rely on mobile banking and digital payments (both cash and ATM usage has declined worldwide), the cash dispenser remains a crucial part of financial services as the banking industry has modernized Wetzel’s original concept the last 50 years.
Today’s ATM not only dispenses cash and accepts deposits, but it also enables consumers to complete a variety of tasks once reserved solely for bank tellers.
“It’s amazing what we have now,” Wetzel said. “We take pride, those who were working with me on the original ATM, that we planted that seed for all the things that were to come for the machine.”
Wetzel, 90, was in Long Island on Friday as the town of Hempstead and the village of Rockville Centre honored him for inventing the American ATM.
The world’s first machine debuted in 1967 when Barclays built and installed an ATM in London in 1967.
Chemical Bank, which had a banking relationship with Wetzel’s employer Docutel Corporation in 1969, installed the first machine at its branch in a location that is now the business hub of Rockville Centre.
Wetzel invented the machine while working at Docutel, which specialized in automated baggage handling. At that point, he had previous banking experience as a branch manager in Texas as well as a bank consultant.
Wetzel on Friday narrated the backstory to his creation. One motivator still resonates today: he despised waiting in long lines to do his own banking business.
“I drove 20 miles to get into a long line that didn’t move,” Wetzel said.
“I’m thinking that I know what tellers do: they cash checks and they take deposits and spend 97% of the time doing that. It seemed like a machine could do that. That’s how I first got the idea,” he added.
Wetzel went back to Docutel to ask his bosses whether the company was interested in further developing the idea. Once he got the permission to pursue the idea, Wetzel said the biggest challenge was figuring out how to make sure the machine dispensed cash to the right individual each time.
For this, Wetzel and his team figured out a way to “scramble” the code on the magnetic stripe of each card so that a new one was created each time someone used the machine.
“Scrambling the credit card code after each use thereof minimizes the chance of unauthorized use of the currency dispenser,” Wetzel and his team wrote in the patent for the machine.
Wetzel said that when he came up with the idea, he never intended the machine to replace human tellers. It was always about convenience and aiding banks in what they already had in tellers. That was evident as the ceremony honoring Wetzel, who lives in Texas, took place inside a JPMorgan Chase branch in the building Chemical once occupied. Local politicians and bank executives praised Wetzel as they stood just steps away from two ATMs and four teller windows.
As the ceremony progressed, JPMorgan customers used both the tellers and the machines to complete their transactions.
“I've been surprised about how the recent changes in ATMs have been so monumental,” said Eyrique Miller, head of transformation and innovation at JPMorgan. “Once you started changing the format of the machines and making the screens bigger, people started thinking a lot about adding more capabilities.”
Miller, who attended the event and was involved in the ceremony, discussed how JPMorgan has contributed to the ATM’s evolution and how the machines will continue to be relevant as cash use declines.
“Does the machine ever go away? No, because I think it provides a lot of convenience,” he said. “But does it evolve over time and become less about cash? Sure, and I think that’s the accessibility part.”