Early Automatic Cash Dispenser Using Credit Cards

This 1973 patent describes a machine that dispenses cash using a coded credit card, verifies the card's validity, and updates its code after each transaction to prevent fraud.

What it covers

This patent details a method for an automated machine to dispense cash based on a credit card. When a card is presented, the machine reads its coded data and compares it against stored verification codes to check for validity, such as bank code, expiration date, or number of uses. If the card is valid, the machine dispenses the requested currency. Crucially, after dispensing cash, the machine updates the card's coded data to reflect the transaction and then re-scrambles it with a changing key. This updated, scrambled code is then recorded onto a new document (presumably a replacement card or a receipt) that is removed from the machine. This process aims to prevent unauthorized use by ensuring the card's code is always current and unique after each transaction.

What it doesn't cover

• —Dispensing cash without a coded document being presented
• —Dispensing cash using a document that has expired or exceeded its usage limit
• —Dispensing cash without verifying the coded data against stored codes
• —Updating the coded data on the document after a transaction
• —Scrambling the coded data after each transaction to prevent reuse

The clever bit

The innovation lies in updating and re-scrambling the credit card's code after every single transaction, effectively creating a unique, dynamic identifier that prevents the same card data from being used repeatedly to withdraw cash.

Why it matters

This patent represents an early attempt at creating an automated banking machine that could dispense cash using a credit card, a precursor to modern ATMs. It addresses the critical need for security in such machines by incorporating data verification and transaction-specific code updates to deter fraud.

Real-world examples

• 1.Docutel Automatic Teller Machine (ATM) prototypes