What we now call the automated telling machine (ATM) and the personal identification number (PIN) are inventions that have transformed the way that customers interact with their money worldwide. With an estimated 3 million machines in existence across the globe, the ATM was first conceived as an idea in the 1930s.
However, it wasn’t until Scottish engineer and inventor James Goodfellow put the idea into practice that the ATM and PIN made the concept a reality in the early 1960s.
So how did he do it?
He studied radio and electrical engineering
James Goodfellow was born in 1937 in Paisley, Renfrewshire, Scotland, where he went on to attend St Mirin’s Academy. He later completed an apprenticeship at Renfrew Electrical & Radio Engineers in 1958. After he completed his national service, in 1961 he found work as a development engineer at Kelvin Hughes (now known as Smiths Industries Ltd) in 1961.
He was tasked with creating an automatic cash dispenser
In the early 1960s, banks sought a practical way of closing banks on Saturday mornings while also maintaining a high level of service for customers.
The concept of an automatic cash dispenser was seen as a solution, and was even theorised as an invention in the 1930s. However, it had never been successfully invented.
In 1965, then Development Engineer with Smiths Industries Ltd, James Goodfellow was tasked with successfully developing an ATM (the ‘cash machine’). He teamed up with Chubb Lock & Safe Co. to provide the secure physical safe and mechanical dispenser mechanism that his invention required.
He improved upon previous, failed designs
The machine needed to be both convenient and functional but highly secure, and all previous designs for ATMs until then had yielded few results. Experiments had been done with sophisticated biometrics such as voice recognition, fingerprints and retinal patterns. However, the cost and technical demands of these technologies proved too extreme.
Goodfellow’s main innovation was to combine a machine-readable card with a machine that used a numbered keypad. When used in combination with a personal identification number (or PIN) known solely to the cardholder, the two forms of encryption would be matched to an internal system that verified or rejected the user’s identity.
From there, customers had a unique, secure and simple way to withdraw money.
His invention was misattributed to someone else
Goodfellow received a £10 bonus from his employer for the invention, and it received a patent in May 1966.
However, a year later, John Shepherd-Barron at De La Rue designed an ATM that was able to accept cheques impregnated with a radioactive compound, which was made widely available to the public in London.
Afterwards, Shepherd-Barron was widely credited with having invented the modern ATM, despite Goodfellow’s design being patented earlier and operating in exactly the same way that ATMs in use today are.
This misattribution was popularised until at least 2005, when Shepherd-Barron received an OBE for the invention. In response, Goodfellow publicised his patent, stating: ‘[Shepherd-Barron] invented a radioactive device to withdraw money. I invented an automated system with an encrypted card and a pin number, and that’s the one that is used around the world today.’
The ATM is also erroneously listed in National Geographic’s 2015 publication ‘100 events that changed the world’ as being Shepherd-Barron’s invention.
He received an OBE
In 2006, Goodfellow was appointed an OBE in the Queen’s Birthday Honours for his invention of the personal identification number. The same year, he was inducted into the Scottish Engineering Hall of Fame.
He has received other awards, such as the John Logie Baird award for ‘outstanding innovation’, and was the first inductee into Paymts.com Hall of Fame at Harvard University. He also received an honorary doctorate from the University of West of Scotland.