Thursday, May 27, 2010

Obituary - John Shepherd-Barron - Inventor of the ATM machine

John Shepherd-Barron passed away on May 15. His is an interesting case of an invention which can be called a true Eureka moment. One day he was in an urgent need of cash but was locked out of his bank since the banking hours were over. While having his bath, the idea of a cash dispensing machine like a chocolate dispensing machine struck him. Being an engineer working with De La Rue instruments, he could give shape to his idea and designed what could be called the first ATM machine. This machine did not work with a plastic card but with a slightly radio active cheque. This machine was first installed by Barclay's Bank in North London on June 27, 1967. Come to think of it, the world existed without an ATM machine just over 40 years ago and now we have more than 1.7 million of them installed worldwide.

Another interesting snippet is that originally, he wanted a 6 digit PIN. But when he asked his wife, she said that she can't remember a number more than 4 digit. And thus was the ubiquitous 4 digit PIN born.

Shepherd-Barron's principal motivation while inventing the machine was 24*7 availability of cash. However, it helped reduce the cost of a transaction greatly and replaced the human tellers rapidly. Today in India, the average cost of an ATM transaction could be as low as Rs 12 (majority of the cost going towards cash counting and transportation) while the cost of the same transaction if done through a teller clerk, in spite of the low salaries, could be Rs 50 or more. The difference between cost of cash dispensed by humans and the ATM machines in the more well economies such as UK or USA would be much higher.

It is quite possible that the plastic card itself or mobile payment products or another invention could obviate the need of an ATM machine in future and the ATM machine becomes but a footnote in the long history of financial innovation. But at the moment, this machine is the mainstay of the retail banking industry replacing the need of a branch with this machine. In fact, Paul Volcker, the former US Fed Reserve Chairman, described the ATM as the last truly great innovation in financial services

Tuesday, May 25, 2010

Community Outreach Program - a Bihar Foundation Mumbai initiative

I am delighted to share that we, Bihar Foundation Mumbai, initiated a community outreach program at Mumbai yesterday. As part of this program, a group of 50 students and 20 senior citizens are visiting the Mahabodhi temple at Bodh Gaya. They would also be visiting places of tourist interest at Patna like the museum as also a visit to the Vishnupad temple at Gaya. The outbound train from Lokmanya Tilak terminus was flagged off by the tourism minister of Maharashtra, Varsha Gaikwad.

The Govt of Bihar is also rolling out the red carpet for the delegates. The return journey will be flagged off by Ram Pravesh Rai, Tourism minister of Bihar. It is thus one of those happy bipartisan events where both the UPA and NDA ministers are participating.

I enjoyed watching the enthusiasm of the people going to Gaya. And why should they not be? They are going to have a long and exciting journey to the holiest of their shrine besides a visit to the oldest continuously inhabited city in the world, Patna.

This is but a small event, like the gentle first rain drops at the peak of summer. Inevitably, it will get evaporated soon. Hopefully, it will also generate the "saundha" smell as also herald the outpouring of monsoon in the coming months. Small as this event maybe, there are two firsts: proactive initiative by Bihar to take tourists from Maharashtra to Bihar as also taking Indian Budhdhist pilgrims to Bodh Gaya as opposed to the foreigners. An interesting snippet is that the the Gaya airport is the only airport in India and possibly in the world that has several regular and chartered international flights from different destinations but not even one from within India.

I do hope this will some day lead to a direct train between Gaya and Mumbai in to facilitate Budhdhist pilgrimage from Maharashtra to Gaya. Thus the traffic will not remain a one way traffic.