The next time you withdraw cash out of an ATM, imagine what it
would be like if you could do it without using a debit card. That
might soon become reality if some banks have their way.
A handful of banks, like City National in Los Angeles,
Wintrust in Illinois, and BMO Harris in Chicago, have begun
experimenting with cardless ATMs. These new ATMs seem pretty
straightforward: log onto your bank's mobile app, type in the
amount of money you want to withdraw, enter your PIN, and voila -
grab your $60 from the ATM.
Supporters of the movement to go cardless at the ATM tout a
number of reasons why it's beneficial, including increased
customer convenience, speedier transactions, and improved
security. But wait a second. Regarding that last point - are
cardless ATMs really that much safer?
In a world where data breaches are becoming as common as
encountering traffic at 5 p.m. - Russian criminals stealing 1.2
billion passwords and
Target's epic data theft
among recent high-profile cases - you might have
reservations about going cardless at the ATM. And your worries
Recently, a man in Tampa was the
victim of theft
, losing $300 from his checking account at SunTrust bank. The
culprit used the man's debit card and PIN number at a cardless
ATM in Miami. Some say the man's data was hacked.
In a cardless ATM transaction, your mobile device works kind
of like a remote control. You enter the correct information on
your phone, head to the ATM, confirm your identity, and leave
with money in your pocket. At some banks, you can even place an
order for cash as much as 24 hours before the transaction. You
just need to have the app open on your phone and scan a code on
the ATM machine to prove your identity. If you're thinking that
this doesn't sound like the safest way to withdraw funds, you
might be right.
With cardless ATMs, it's easy to identify where hackers or
mistakes can disrupt the process and leave you vulnerable to data
theft. Spy cameras and hidden skimmers are tiny devices difficult
to detect and they can be used to capture your data.
Phones can also be easily lost or stolen. And what a friend or
family member borrows your phone? Is it possible that he or she
could use it to withdraw cash? Since these types of ATMs are in a
test or pilot phase, consumers who go cardless might be
particularly susceptible to theft. Because the technology is
still being tested out at select locations, kinks need to be
worked out before ATMs are rolled out to the public at large.
Safety, of course, should be the primary concern so that the
events that happened in Tampa are not repeated again.
The move toward mobile
One reason why midsized banks like Wintrust are turning to
cardless ATMs is competition. Mid-sized banks and credit unions
have to compete with larger - and richer - financial institutions
as well as big players in the tech field like Google and PayPal.
The cardless ATM movement is just one part of a larger push
toward mobile, which is expected to be a big growth area for
"Mobile wallets are inevitable. When it happens is a different
story," said Tom Ormseth, senior vice president at Wintrust, in a
FIS careless cash access
. Ormseth believes that it takes less than 11 seconds to pick up
money from a cardless ATM. See for yourself in
Wintrust's mobile development comes at a time when big banks,
like Bank of America, are heavily investing in digital banking.
This year, Bank of America surpassed 15 million active mobile
banking customers - and that number is growing by more than
200,000 each month.
It's clear that consumers are increasingly using their mobile
phones to conduct more activities and do more things, but are
they ready to use smartphones to withdraw money? Cardless ATMs
would be convenient for many consumers, saving them time and
easing fears they might have about losing their card. But there
are still many questions that need to be answered about the
safety of careless ATMs, which are already used overseas in
places like South Africa
What does the future hold?
Still, with banks investing so much in mobile, it's exciting to
what the future holds
. Using your mobile phone to withdraw cash opens up several
possibilities. In the future, cardless ATM users could
potentially receive offers and discounts from nearby
Another possibility for the future: a user could authorize a
third party to withdraw a specific amount of cash from his or her
account, using the app to pick a person from the user's contacts
list. The app can then send a text message to that person with a
code that he or she can use at an ATM to withdraw money. Mobile
technology could also be used to strengthen methods of
identification at an ATM.
Any benefits that arise from using mobile technology in
banking are a long way off. Many people are not yet ready to use
their mobile phones as wallets or to withdraw cash. If you're
concerned about going cardless at the ATM, you might have some
time to come to grips with your grievances. In a survey of 92
U.S. Independent ATM deployers
, half said they have not yet developed a strategy to implement
contactless or mobile transactions at the ATM. And nearly half
are unsure how these types of ATMs might affect the industry.
What do you think about these types of ATMs? Leave a comment
and let us know: Would you use a cardless ATM? Why or why
This article originally appeared on
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