When Luther George Simjian demonstrated his cash machine prototype in 1939 to a bank now known as Citibank, he was eventually sent packing. The public did not want machines handling their money.

He was three decades ahead of his time. In June 1967, at the Barclays branch in Enfield, North London, actor Reg Varney became the first person to withdraw ten pounds from an electronic “hole in the wall”.

Today, the automated teller machine industry is worth £14 billion, with 1.5 million machines operating worldwide — a figure forecast to grow to 2 million by 2010. HSBC estimates that 95 per cent of withdrawals are made through cash machines rather than human tellers.

In the coming weeks, the industry will mark 40 years since Varney withdrew ten £1 notes from an early model cash machine. Designed by John Shepherd-Barron, a Scot employed by De La Rue Instruments, the cash dispenser used vouchers impregnated with Carbon 14, which were bought from tellers in advance.

The inventors foresaw problems with security, which has remained an issue with fraud, theft and ATM-related scams costing hundreds of millions of pounds a year.

Another Scot, Jim Good-fellow, pioneered the personal identification number concept, while the first use of magnetic strip cards, developed by Don Wetzel’s team at Docutel, took place at a cash machine at New York’s Chemical Bank.

However, they did not foresee the row over cash machine-related charges, which sparked consumer outrage when banks moved to charge for the transactions conducted by nonaccount holders.

Abolishing those charges in the late 1990s heralded a move to buy independent cash machines, which charge as much as £3 for a transaction.

The explosion of independent and bank-owned cash machines has been spurred by the evolution of the cash dispenser into a one-stop digital shop.

Felix Group, an AIM-listed leisure and technology company, is preparing to roll out cash machine add-on functions including flower purchases, digital photo printing and interactive games.

HSBC has spent the past 18 months renovating the most popular 400 of its 1,500 UK branches to incorporate express banking technology and mobile phone top-ups.

David Nibloe, head of HSBC Express Banking, said: “The express banking machines are quite sophisticated — they address consumer concerns about putting money and cheques into machines. We have addressed the psychological barrier and it’s faster than giving cash to a teller.

He added: “The future of the ATM is quite fantastic. In the future your ATM will recognise you as a customer; it will be a truly interactive device, that if you choose to do so will let you do all your banking with it. Our customers are telling us they want this.” Mr Nibloe said that the technology is allowing banks to bring staff back outside the glass panel. “There are fewer teller transactions in face-to-face banking. It is more personal finance and opening accounts — something you don’t need to be behind plate glass for.”

Telling story

1967

the date ATMs were introduced to Britain

£10

the amount drawn by Reg Varney, the actor, on the first occasion

60,000

the number of ATMs across the UK

30m

the number of Britons who use ATMs

1.5m

the number of ATMs worldwide

$24bn

the expected global market for bank machines by 2010

95%

proportion of bank cash withdrawals made via ATMs

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