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The Story of the ATM and its Role in Financial Inclusion (Demo)

The first ATM was unveiled on June 27, 1967, outside Barclays in Enfield CREDIT: BARCLAYS


John Shepherd-Baron, the Managing Director of De La Rue Instrument, a British company that printed currencies, couldn’t settle with the fact that being “one minute too late” to the bank was enough reason to be denied access to cash for the weekend.


If he could get chocolate bars from a dispensing machine round the clock, why not do the same with money? He thought to himself in a Eureka moment. This led him to approach an executive at his bank, a branch of Barclays in England, about the idea of a cash-dispensing machine. The story goes that the executive responded, “If you can make this device you are speaking about now, I will buy it right now.”


On June 27, 1967, the ATM debuted to a lot of fanfare at the Enfield branch of Barclays Bank in London, an event anchored by a British sitcom star to promote the machine for its convenience and self-service. 


As typical of most inventions, there were challenges down the road for the ATMs. In 1969, John described the system to the conference of the American Banking Association but was said to have received a lukewarm response and made the sale of only just one machine. When it was later debuted in the US, many bank customers were a little apprehensive at first. This made banks station employees at the machines to demonstrate their use and explain the features of the card and machine. Names such as, “Tillie the All-Time Teller”, was given to this machine so as to build a personality around it.


The success of the ATM as an invention that has come to stay was later accelerated with the invention of plastic bank cards with magnetic strips and the widespread internet connectivity. In 2015, John Sheperd-Baron was made an Officer of the Order of the British Empire for his services to the Banking Industry. And in 2015, an estimate by the ATM Industry Association (ATMIA) revealed that there are more than 3.5 Million ATMs worldwide.


As the drive for financial inclusion continues in the developing world. It has been identified by several stakeholders that access to cash is the first step towards financial inclusion for the unbanked and underbanked.


Africa’s leader in financial inclusion, South Africa, is a proof of ATMs as a contributor to financial inclusion. With a financial inclusion of 75% as of 2014 according to Finscope, the country has had an increase from 29.71 ATMs in 2005 to 69.29 per 100,000 people in 2015, according to the World Bank. Nigeria with 44% of financial inclusion according to the same source has had its ATMs jump from 0.68 in 2005 to 16.8 per 100,000 people during the same timeframe.


As we move towards a more cashless society, what then will be the future of ATMs, especially with the advent of mobile banking?


According to the Electronic Payment Fact Sheet by the Enterprise Intelligence Unit of the Nigeria Inter-Bank Settlement System Plc (NIBSS), transactions over ATMs recorded the highest number of activities among all e-channels at 212.37 million for ₦1.57 trillion in value. This makes it safe to conclude that Nigeria, like many other developing countries, is still a hugely cash-based society.


In February 2018, it was revealed that through the ATMs of First Bank of Nigeria, a purchase of N1.7 billion phone airtime was made in 2017 alone. The bank would account for 37% of bills payment transactions on ATMs across the country. A statement by the bank disclosed that about 402,102 bill payments were made through its ATMs in 2017. This is an evidence of the changing role of the ATM.

Building on the selling points of Convenience, Self-service and round the clock accessibility, the ATM is transitioning from just being a cashpoint to a hub of financial services.














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