The Stack Archive

Cardless ATMs use smartphones to access cash

Tue 14 Feb 2017

JP Morgan Chase, along with Bank of America, have started pilot programs to roll out cardless ATM machines in the U.S. In select cities, customers may perform ATM transactions including checking balances, transferring funds, and deposit and withdrawal of cash using a smartphone in place of an ATM card.

Currently, only 2.5% of ATM machines have cardless capabilities, but some estimates are that the number of upgraded machines will reach 25% by year-end.

In a communication to investors, JP Morgan Chase noted that upgraded ATM machines that include cardless options are currently being rolled out at branches nationwide. The upgraded machines will be capable of performing 90% of teller transactions, allowing customers to complete most of their banking needs without stepping foot in a branch or speaking with a human.

Advantages to the upgraded ATMs include a lower risk of fraud due to skimming, a process whereby hackers compromise ATM machines, steal banking information from an individual’s ATM card, and use that information to clear out their accounts. Banks also stand to save money in lower personnel costs, without compromising services or customer convenience.

Customers using cardless ATM machines at Chase banks must have a smart phone associated with the Chase account. After initiating a transaction a verification code is sent to the phone. When that code is entered or scanned at the ATM machine, the requested amount of cash will be dispensed.

Often ATM machines have limits to withdrawals in the $200-$500 range, but Chase allows up to $3,000 to be taken in a single withdrawal if it is made during regular business hours at a Chase branch ATM.

However, instances of fraud have already been reported. In November, a Chase customer reported a loss of $3000 that was withdrawn fraudulently from a cardless ATM. The money was later refunded by the bank, but in his pursuit of repayment he encountered a couple that reportedly lost $7,000 in a similar incident. In January, another customer of Chase reported a loss of $2,900 in a cardless ATM transaction.

As far back as 2012, NatWest Bank in the U.K. was required to suspend their GetCash app program after cardless transactions resulted in fraudulent withdrawals. They have reinstated the program, however, and now use a code texted to the customer’s smartphone for authentication purposes.


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