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Automated Teller Machines

The first automated teller machine and the first debit card transaction in Canada were developed by Saskatchewan credit unions. Under the direction of its vice-president, Ed Gebert, Sherwood Credit Union introduced its first Automated Teller Machine (ATM), also known as Automated Banking Machine (ABM), in 1977. Sherwood, now known as Conexus Credit Union, worked with Co-operators Data Services (now called CGI), Credit Union Electronic Transaction Services (CUETs), and Credit Union Central of Saskatchewan to create the ATM system. Initially, the ATMs at the Sherwood Credit Union’s two branches in Regina provided service eighteen hours a day, seven days a week, with a maximum withdrawal of $200. Since then the system has sprawled across the country, and over 36,000 machines are available from coast to coast.

The next logical step in the evolution of electronic banking was the introduction of debit cards. The MasterCard payment card, a forerunner of today’s debit card, was introduced to Canadians by Saskatchewan credit unions in 1982; called MasterCard II, it allowed credit union members to pay for purchases directly at the point of sale without running up credit card interest charges. Now called the Global Payment MasterCard, the credit unions’ card can be used at 14 million locations around the world. The first true debit card was piloted in May 1985 by credit unions in the Swift Current area, and involved the installation of a point of sale system at twenty-eight Co-op outlets. The one-year trial was successful, but credit union members demanded cards that could be used with merchants in addition to just the Pioneer Co-op.

At about the same time, the Interac Association was being formed to promote the concept of sharing access to ATMs among various financial institutions in order to allow people to access their money more readily across the country. This led to the recognition that debit cards would also work if merchant terminals were shared; this concept led to the introduction of debit cards in the early 1990s. Now nearly half of all purchases in Canada are made with a debit card, and in 2003 about 19 million Canadians (86% of the population) had debit cards.

Joe Ralko

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