Which banks are replacing current ATMs with ‘cardless’, smartphone-enabled machines?

Rather than using a debit card to withdraw cash from an ATM machine, customers may soon be using smartphones instead.

Dozens of US banks are already installing new ATMs, or updating existing ones, to allow customers the ability to withdraw cash via mobile app. Included in this group of trend adopters are three of the country’s biggest financial institutions: Wells Fargo, Bank of America, and Chase. 

“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 explained that there are already close to 2,000 “cardless” ATMs in use by at least 28 US-based banks, and that his company is “looking to rapidly expand that,” with the belief that some 80,000 machines will be added to the North American market over the next year-and-a-half.

The reduction of vulnerabilities that Brown is referring to includes “skimming” fraud, in which criminals steal data on a card by inserting devices into the ATM card slot. Early estimates suggest the global banking industry suffered $2 billion in losses due to skimming and other kinds of fraud involving the theft of debit card data. 

Another benefit to these new machines is that authenticating on the device reduces time spent at the ATM to around 10 seconds total; this, as opposed to the typical 35-to-40 seconds currently spent when using a debit card.

“The performance is kind shocking to some people, they almost jump back at the instantaneous response,” Brown said. “But it provides more physical security because they can make the transaction faster.”

Betty Riess, a spokeswoman for Bank of America, said her group is “currently developing a new cardless ATM solution” based on near field communication technology. 

“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 said. “It will be followed by a broader customer launch mid-year.”

Chase spokesman Michael Fusco said his group is planning a similar rollout at some point this year too: “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 their transactions.”

“Later on, they will be able to use their digital mobile wallet to complete the transaction at the ATM,” Fusco added. 

Wells Fargo spokesman Kristopher Dahl said his bank will support Android Pay during the immediate rollout of the new systems, “and we’ll continue to evaluate additional wallets.” 
In terms of updating all of these machines, the banks report some will require only a software update, with no need for additional hardware. 

Diebold, an ATM manufacturer, is currently designing a “headless” teller machine, which has neither a screen nor a keypad, and which dispenses cash based solely on interaction from the smartphone. 

“What we are saying with this is forget the card reader, forget the PIN pad, we all have these devices in our pockets,” said Dave Kuchenski, Diebold's senior business development manager for new technology. He went on to explains that customers will only need to verify their identity, which can be done either by the device’s fingerprint scanner, or an iris scanner on the ATM. 

Kurchenski said this machine is already being tested out at a few Citibank locations, and that his group right now is adjusting the machine to provide “a better user experience.”

“We don't have to walk through the same process which we have had since the ATM has existed,” he said.

“If we're using a mobile phone, we no longer have the need for a card, we no longer have a need for a receipt printer, we've dematerialized a lot of the devices. Banks like this, because it has fewer moving parts, so it reduces the total cost of ownership.”

Via phys.org