Feb 22, 2016

    Need cash at the ATM? No need to insert a card


    HERE'S another use for the smartphone as it invades daily life: in place of your debit card at your bank cash machine.

    The "cardless" automatic teller machine (ATM) is gaining ground in the United States and around the world, with smartphone technology allowing for speedier and more secure transactions.

    Dozens of US banks are installing new ATMs or updating existing ones to allow customers to order cash on a mobile app and then scan a code to get their money without having to insert a bank card.

    US banking giants Wells Fargo, Bank of America and Chase are in the process of deploying the new ATMs, as are a number of regional banks and financial groups around the world.

    Makers of ATMs and financial software groups are ramping up to meet this demand.

    "We think our model (using smartphones) reduces a lot of vulnerabilities," said Doug Brown, who leads mobile technology for FIS Global, a major provider of software and technology for ATMs.

    He added that the FIS cardless system is being used at some 2,000 ATMs operated by at least 28 banks in the US.

    He noted that the system should be operational at some 80,000 machines in North America over the next 18 months.

    In addition to speeding the transaction time, the smartphone-based system aims to curb the growing problem of "skimming", in which criminals steal the data on a card, often by inserting devices into the ATM card slot.

    By some estimates, skimming cost the global banking industry some US$2 billion (S$2.8 billion) in 2015 and can lead to other kinds of fraud when card data is stolen.

    Another security benefit, Mr Brown said, is that authenticating on the handset reduces the time spent at the ATM to around 10 seconds instead of the typical 30 to 40.

    Bank of America spokesman Betty Riess said the group is "currently developing a new cardless ATM solution", based on NFC or near field communication technology, to allow customers to authenticate without the use of a card.

    "We'll roll out this capability in late February to associates in select ATMs in Silicon Valley, San Francisco, Charlotte, New York and Boston," she added.

    Chase is planning a similar initiative this year. "When we first roll this out, customers will be able to request an access code through the Chase mobile app and enter it at the ATM to do transactions," said spokesman Michael Fusco.

    Wells Fargo is also developing ATMs that will allow customers to use their smartphones to obtain an eight-digit token to authorise a cash withdrawal.

    Chicago-based BMO Harris, an affiliate of Bank of Montreal, began using smartphone technology at its 750 ATMs last March.

    Some of the new technologies will require only a software update to the ATM while others will need new hardware.

    ATM manufacturer Diebold is testing a "headless" teller machine, without a screen or keypad, which dispenses cash from interaction on the smartphone.