IBM automated teller machines

IBM designed, manufactured and sold automatic teller machines (ATMs) from 1972 till 1998 when it exited the market by selling all remaining assets to Diebold.^[1]

The IBM 2984 Cash Issuing Terminal was designed at the request of Lloyds Bank which they called a Cashpoint. They began installing them in 1972 and by 1978 they had 670 of these terminals installed, processing over 200,000 withdrawals weekly totalling around 5 millions pounds in cash.^[2]. It was replaced by the IBM 3614.

Unusual by today's standards, the customer's ATM card was inserted with the magnetic stripe up. Modern ATMs typically are built to expect customers to insert their card with the magnetic strip facing down (with the added benefit of the card issuer's logo being displayed to the customer on insert).

The IBM 3614 Consumer Transaction Facility is an online banking terminal that gives customers direct, self-service access to their accounts. Through the device, customers can withdraw cash, deposit funds, check account balances, and carry out any additional transactions configured by the financial institution. An optional deposit module enables bill payments alongside standard deposits, and an optional receipt printer provides customers with a printed record of each transaction.^[3]

Four models of the 3614 are available:

• Model 1 — Indoor installation, single denomination, for use during normal business hours
• Model 2 — Exterior wall-mounted, single denomination, accessible any time of day or night (or as determined by the institution), even when the branch is closed
• Model 11 — Same as the Model 1 but dispenses two denominations
• Model 12 — Same as the Model 2 but dispenses two denominations

Models 11 and 12 are collectively referred to as Dual Document Feed models.^[3]

All 3614 models support the following optional features: transaction statement printer, depository unit, transaction chaining, transaction journaling, and check cashing. The last three — transaction chaining, journaling, and check cashing — are grouped under the designation Expanded Function Features.^[3]

A 40-character display guides customers through each step, prompts correction of any input errors, and returns account information visible only to the account holder. The unit also includes a card retention mechanism for flagging stolen cards, and can trigger an external alarm if tampering is detected.^[4]. It was withdrawn from marketing on the 9 June 1981.^[5]

The IBM 3624 was released in 1978 as a second-generation automatic teller machine (ATM), a successor to the IBM 3614, which was itself a successor to the IBM 2984.^[6] Designed at the IBM Los Gatos lab, the IBM 3624 was manufactured at IBM facilities in Charlotte, North Carolina and Havant, England

The 3624 was marketed in eight different versions. The 3624 Version 8 incorporated use of a six-row by forty-column dot-matrix customer display,^[7] four line by 34 character statement / journal printer, labeled function / account keys, one to two currency cartridges and an optional depository. Earlier models, such as the Version 2, featured a smaller two-line display. At announcement there were four models:^[8]

• Model 1 — Dispenses a single denomination; designed for indoor installation such as a building lobby
• Model 2 — Dispenses a single denomination; mounted through an exterior wall for outdoor access
• Model 11 — Dispenses two denominations; designed for indoor installation such as a building lobby

• Model 12 — Dispenses two denominations; mounted through an exterior wall for outdoor access

The transaction records printed by the 3624 and used by customers to verify their transactions were approximately 3 inches square, repurposing IBM's older 96-column punch-card printers. When performing deposits, customers were instructed to place a special transaction record inside of the deposit envelope to aid in the processing of the transaction by the back-office staff.

An unfortunate design characteristic of the 3624 was that the vault that contained the cash dispenser was located in the upper area of the unit, making it top-heavy. This made the 3624 an extremely awkward machine to transport up and down stairs. Another complaint against the 3624 was the relatively small size of the cash cartridges (used to give money to customers) in comparison to other vendors' equipment at the time.

As was typical for ATM hardware of this era, the IBM 3624 had two distinct high-level communications protocols. The first, a direct mainframe attachment through SDLC links, was an IBM SNA LU0 protocol.^[9] The second was an attachment to the IBM 3600 and 4700 series of banking equipment, and was a start-stop TDM loop with time slots assigned to specific 36xx series equipment at 1200 bit/sec.

The IBM 3612, 3624 and 3600 communications protocols were incompatible with other ATM vendors' high-level communications protocols.^[10]

One of the most lasting features introduced with the 3624 was the IBM 3624 PIN block format used in transmission of an encrypted personal identification number (PIN).^[11][12] The PIN functions, with an early commercial encryption using the DES algorithm,^[13][14] were implemented in two modules — BQKPERS and BQKCIPH — and their export controlled under the US export munitions rules.

In 1983, IBM introduced the IBM 4700 Finance Communication System, a complete refresh of its branch banking platform that replaced the earlier IBM 3600 series.^[15] Alongside the 4700 controllers came a new family of ATMs designated the IBM 473x series, marketed as "Personal Banking Machines" (PBMs).^[16] Known models included:

• IBM 4730 — Counter-style Personal Banking Machine (1983)^[16]
• IBM 4731 — In-lobby Personal Banking Machine (1983)^[17]
• IBM 4732 — In-lobby Personal Banking Machine (1987)^[18]
• IBM 4736 — Cash-only Personal Banking Machine^[16]
• IBM 4737 — Self-service transaction station^[16]
• IBM 4738 — Personal Banking Machine variant^[15]

The 473x series was a commercial failure. The 4731 and 4736 were introduced in 1984, but proved incompatible with the widely deployed IBM 3624, which remained in use at many bank branches.^[15] The 4700 controllers could support some older 3600 peripherals, but 4700 peripherals could not be used with the existing 3600 controllers installed at most banks. This meant that prospective 473x buyers would have needed to replace substantial portions of their back-office infrastructure to adopt the new machines.^[15]

Competitors exploited this incompatibility. NCR Corporation built market share by equipping its contemporary ATMs with 3624 software emulation, offering banks a drop-in modernisation path for their existing 3600 systems without requiring a wholesale infrastructure change.^[15] Other ATM manufacturers pursued multiprotocol designs that could interoperate with multiple host systems.^[15]

The 4732, which featured a full CRT display replacing the earlier multi-line vacuum fluorescent displays, was the most widely referenced model in the series but still achieved very few sales.^[15] The various 473x models were introduced between 1983 and 1988, representing nearly a decade of IBM's efforts in the ATM market with minimal commercial success.^[15]

After the failure of the 473x series, IBM effectively exited the proprietary ATM design business. In July 1990, IBM and Diebold, Incorporated announced a joint venture called InterBold, headquartered in North Canton, Ohio.^[19] Diebold held a 70 percent ownership stake and supplied the ATM hardware, while IBM contributed software development, systems integration capabilities, and its international marketing and distribution network.^[19]

Under the terms of the joint venture, Diebold marketed the combined ATM lines in the United States, while IBM marketed them internationally, particularly in Europe, Asia, and Latin America, where IBM had historically been the stronger brand.^[20] The ATMs sold by IBM under the InterBold arrangement were designated the IBM 478x series and were rebadged versions of the Diebold 10xx (Modular Delivery System) family.^[21] Not all Diebold 10xx models were offered under the IBM brand.^[21]

Known IBM 478x model-to-Diebold mappings included:^[22]

Within a year of the venture's formation, InterBold introduced the "i Series" ATM refresh in 1991, which was the first ATM model to use "image-lift" technology, allowing customers to see an image of deposited cheques on the ATM screen.^[19][23] The i Series machines were guaranteed to perform 99 percent of the time and included features such as stamp dispensing, account statement printing, and improved accessibility for disabled users.^[23] The 10xx/478x platform was further updated to the "ix Series" variant in 1994.^[21]

InterBold became commercially successful, and by September 1995 Diebold was manufacturing over half of all ATMs used in the United States.^[20] However, IBM grew dissatisfied with the returns from the venture, partly because developments in the broader computing market had undermined its strategy of linking ATMs to expensive mainframe systems.^[15] For its part, Diebold was dissatisfied with IBM's sales efforts, which often fell short of quota, as IBM salespeople treated the ATMs as just one product among many in their portfolio.^[24]

In July 1997, IBM exercised an option to sell its 30 percent minority ownership in InterBold to Diebold.^[25] After the two companies were unable to agree on a price, the matter was referred to a third party.^[26] The InterBold partnership was formally dissolved on 19 January 1998, when Diebold completed the purchase of IBM's share for $16.1 million.^[27][20]

The dissolution of InterBold marked the end of IBM's direct involvement in the ATM market. The Diebold 10xx platform, which had been sold under the IBM 478x designation, continued in production and was eventually replaced by the Diebold Opteva series of ATMs in 2003.^[21]

Although IBM's post-3624 ATM hardware was commercially unsuccessful in its own right, the company's influence persisted in the broader ATM industry. The IBM 3624 PIN block format remained an industry standard for PIN encryption long after the hardware was discontinued. Many later ATMs, including those produced through the InterBold partnership, ran OS/2, IBM's operating system.^[15] The IBM 3624's communications protocols and design concepts were sufficiently influential that competitors, most notably NCR, built successful ATM product lines in part by duplicating or emulating aspects of the 3624 architecture.^[15]

• A brief mention of the 3624 protocol from IBM