Automated teller machine

The first ATM was installed in 1967 at a Barclays branch in Enfield, London, invented by John Shepherd-Barron. Early machines used paper vouchers impregnated with carbon-14 for security, later replaced by magnetic stripe cards. In the 1970s, networked ATMs enabled interbank transactions, and by the 1980s, they became ubiquitous in developed countries. The 1990s saw the rise of off-premise ATMs in retail locations, and the 2000s introduced cash recycling and biometric authentication. Today, ATMs are evolving into multi-function kiosks with contactless and mobile integration.

ATMs connect to a host processor via dial-up or leased lines, using protocols like ISO 8583. They authenticate users via PIN, card, or biometrics, and dispense cash using a hopper and dispenser mechanism. Modern ATMs support cash and check deposits, with image capture and validation. Security features include encryption, tamper-evident systems, and anti-skimming devices. Software is often based on Windows or Linux, with remote monitoring and cash management. Some ATMs offer multi-currency dispensing and accessibility features for visually impaired users.

ATMs have transformed banking by extending service hours and reducing branch costs. They are critical in rural and underserved areas, providing financial inclusion. In developing countries, mobile-phone-linked ATMs and micro-ATMs serve unbanked populations. The number of ATMs peaked around 2019, then declined slightly due to digital payments, but cash remains dominant in many economies. ATMs also generate revenue through surcharge fees and are a key channel for cash management in retail. The COVID-19 pandemic accelerated contactless and cardless ATM transactions.

Beyond cash, ATMs have niche uses: they dispense gold bars in some countries, sell postage stamps, and even offer bitcoin purchases. The first ATM in the Soviet Union appeared in 1987, and Antarctica has an ATM at McMurdo Station. Some ATMs are solar-powered or operate in extreme environments. The world's highest ATM is in Pakistan at 4,693 meters. ATMs have been used in art installations and as emergency communication points. A notable failure: the 2018 'ATM hack' of Cosmos Bank in India, where malware drained $13.5 million. Also, the term 'ATM' is often used generically, but 'cash machine' is preferred in the UK.

PIN

Personal Identification Number, a security code used to authenticate a cardholder.

Host processor

A central system that routes ATM transactions to the appropriate card network or bank.

Cash recycling

A feature that allows an ATM to reuse deposited cash for dispensing, reducing refill frequency.

Skimming

A fraudulent technique that captures card data using a hidden device on an ATM.