Glasgow 850: Pioneers of the ATM - A Scottish Legacy of Innovation

The story of the cash machine is that of two Scottish engineers: James Goodfellow, the Glaswegian inventor of the first machine to use a PIN system; and John Shepherd-Barron, the inventor of the first cash machine ever installed. 

James Goodfellow was a young employee of the Smiths Industries subsidiary Kelvin Hughes, based in Hillington in the west of Glasgow. In the mid-sixties, he was first tasked with developing a machine which could dispense cash to customers when the bank was closed. His first prototype included components of a chocolate bar dispenser.

Kelvin Hughes was best known for manufacturing navigation systems, including radar. While James Goodfellow was to provide the design for the electronics, Chubb Lock & Safe Co. were tasked with the mechanical aspects of the cash dispenser.

A patent application was filed for Goodfellow’s invention in the UK on 2 May 1966, and describes pairing a coded token with a plural-character word PIN. The system would only dispense cash to the customer if the PIN corresponded to the coded token in a predetermined way. Circuitry inside the dispensing machine was configured to read a plastic card punched with holes which would identify the customer, their account number, their branch, and the PIN, requiring only 30 bytes of data. Unlike the rest of the information on the card, the PIN would be scrambled such that it could not be deduced from the card. During development of the system, the code used to obfuscate the PIN was put to the test by experts to ensure it could not be deciphered.

Aside from the standard layout encompassing ten numbered keys for inputting a PIN, the patent describes an embodiment including a dial, such as would have been found on a rotary telephone. The patent even suggests that the system could retain the plastic card, with a new card issued for every withdrawal.

Westminster Bank were the first to approach Smiths Industries to develop a cash dispenser. However, they were not the only ones who sought to provide their customers with a more convenient means of accessing cash. Prior to the Goodfellow patent being granted on 25 July 1967, a cash machine was displayed in London on 27 June 1967, with the support of Barclays bank.

Amazingly, its inventor, John Shepherd-Barron, also owes some inspiration to chocolate bar dispensers. However, in order to keep his work secret, Shepherd-Barron avoided filing a patent application to protect his invention. Shepherd-Barron’s system involved irradiated cheques, verified by a four-digit PIN. The cheques were single-use, and would have been obtained in advance during the bank’s opening hours. If Shepherd-Barron had made a public disclosure of his De La Rue Automatic Cash System before 2 May 1966, it would have constituted prior art against Goodfellow’s patent application.

In 2005, when Shepherd-Barron was awarded an OBE, Goodfellow was able to produce his patent as proof that he was first to invent the PIN system using plastic cards, the precursor to modern ATMs still in use today. Both inventors claimed to have conceived their respective solutions to combat limited bank opening hours in 1965, but only Goodfellow had a patent to show for it.

Shepherd-Barron was Managing Director of De La Rue Instruments at the time, and reportedly did not make any profit from his invention. As an employee of Kelvin Hughes, James Goodfellow’s compensation for assigning the world-changing invention to his employer amounted to a £10 bonus, around £160 in today’s money.

James Goodfellow was awarded an OBE in 2006, and was inducted into the Scottish Engineering Hall of Fame in 2016, placing him among famous names such as James Clerk Maxwell, Alexander Graham Bell, and John Logie Baird. He also holds a patent granted in 2000 for a PC connected to an input device (for example, an LCD screen) located in a separate room of the home, communicating using ultrasound, infrared radiation, or radio frequency signals.

Today, Glasgow has its own “Wall Street on the Clyde,” a thriving financial district which is home to companies such as Bank of Scotland, Santander, Barclays, Morgan Stanley, and JPMorgan Chase. The International Financial Services District has been in the making since 2001, spearheaded by Scottish Enterprise and Glasgow City Council, with significant private investment.

Contrasting Goodfellow’s hardware-based punched card system, modern fintech inventions often relate to software, typically with a focus on cybersecurity, financial responsibility, accessible investments, and data analytics. Another major focus is sustainability, with a category devoted to Climate & Environmental Impact at the Scottish Financial Technology Awards. As artificial intelligence becomes increasingly ubiquitous, innovators are harnessing its predictive capabilities for financial technology.

While patentability exclusions exist in the UK and Europe related to software inventions, software which has a technical effect may still be patentable. Software-based fintech inventions are worthwhile protecting, just as banking security protects account holders. 

From long before the invention of the ATM, banking has had a major impact on society since its inception. Just as Goodfellow’s secure ATM system revolutionized banking, today’s fintech pioneers are reshaping financial access and responsibility through intelligent, user-centric platforms.