The birth of Automated Teller Machines
Bank of America piloted its first ATM at the Stonestown branch in San Francisco in September 1969.
Before automated teller machines (ATMs) were invented, people could only conduct their banking business face to face. But the growing demand for off-hours banking and more convenience, as well as the lengthening lines in most banking centers, demanded an automated alternative.
The ATM machine was initially known by two different names: the Autoteller and the Cash Dispenser. Autotellers were the machines found inside of bank financial centers, whereas Cash Dispensers were installed in places outside of a bank branch. Bank of America began using the Autoteller as early as 1957, but at the time, customers would usually choose a live teller over the Autoteller when given the choice.
The ATM as we know it today was piloted at the Stonestown branch in San Francisco in September 1969. Bank of America was the first bank in the nation to develop its own proprietary ATM for its customers. It was outside of the branch and available for use by customers who signed up in advance. Signing up was free, and the bank estimated that more than 4,000 customers would want to use the ATM. But by the end of 1970, only about 300 customers had signed up to try it.
The original ATM users received two cards, each with a six-digit code. Customers could use the cards to withdraw up to $50, $25 per card, from their accounts. The ATM worked much like they do today: insert the card, enter the code, get the cash. But these early ATMs did not return customers’ cards. At the end of each day, the ATM transactions were audited and all customers who used it were charged a 25-cent service fee. Cards were collected and mailed back to their owners to be used again.
Despite initial skepticism from the bank and other industry experts about the long-term viability of the ATM services, the machines were ultimately successful because they addressed two important and growing needs. One was the need for off-hours banking services and the other was the need for access to bank accounts at other non-bank locations such as grocery stores and shopping malls.
Today, Bank of America has more than 16,000 ATMs. There are more than 400,000 ATMs in the United States and an estimated 3 million worldwide.
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