Cardless ATMs that offer contactless tap-and-go transactions with mobile smartphones are starting to be deployed to ATMs in the United States and across the world. This new technology uses NFC and an app on your smartphone to quickly and easily withdrawal cash by simply touching your phone to a sensor radio chip on a new generation ATM. Driven by millennials that want quick and easy access to cash using their phone, new generation ATMs will connect to a mobile application in your smart-phone using near field communication (NFC) to authenticate and authorize cash withdrawals.
The mobile phone has evolved just from a voice medium to a rich channel for Internet data exchanges and consumer commerce. Convergence (News - Alert) of mobile communications and self-service applications are driving innovation at the ATM. Mobile devices of today are capable of becoming smart ATM access tools that can offer many of the keyboard and display functions that are available on a traditional ATM – with some functions available while you are standing in front of an ATM and some even when you are not near an ATM.
According to the National Credit Union Administration, "The reality is smartphones may end up being the way most consumers gain access to ATMs in the future."
Many ATM companies have already started rolling out newer machines that are equipped with this amazing technology or capable of being upgraded. However, just deploying ATMs with NFC capabilities is just half the task. The technology will be of little use until the banks roll out NFC capable applications for ATM use and consumers start giving it a try and feeling comfortable with it. Let’s explore more about this amazing technology in the following section.
What are the benefits of new generation ATMs?
Technology is meant to save our time and make life easier, isn’t it? Well, new mobile-friendly ATMs that allow customers to withdraw the cash from ATM using their mobile phone cuts the time it takes to complete an ATM transaction in half!
New generation ATMs can support finger print technology, video cameras for facial recognition, two-factor verification and validation, and anti-skimming technology. If users initiate their ATM transactions through their mobile devices, it eliminates the risk of the card skimming.
- Offers based on locations
A solution that is being tested prints the offers from the nearby merchants on the ATM receipt of the users. The customer can simply scan QR code for redeeming the offer at neighboring merchants.
An interactive ATM locator that uses advanced integrated GPS technology for locating nearby ATMs with new generation features is important for adoption. It not only guides the customers to the location of the nearest ATM, but it also tells whether they are surcharge free or not or support contactless transactions.
Beyond mobile-integrated transactions
New generation ATMs of the future will go beyond mobile-integrated experiences, expanding services offered with the introduction of money transfer, mobile top ups, bill payment capabilities to pay utility or other bills, and the ability to pay in cash to buy electronic goods and services online.
The usability and design of the ATM is evolving at the same time additional functions are being added. New generation ATMs will be capable of dispensing cash like prior generation ATMs but will also accept cash payments for new services like money transfers and purchases of electronic goods or service.
What are the challenges?
One of the major challenges facing the use of mobile technologies at the ATM is lack of scalability and interoperability. While a solution may seem to be slick and cool, if it works just with its own network, its overall value will be limited.
While it’s true that there is obvious security positives related to new technology, there are still risks with new technology – and people will still require reassurances that the codes or devices they use for accessing an ATM without a card cannot be spoofed and hacked. The use of biometric capabilities on smart-phones including fingerprint scanning and facial recognition is improving every year but it’s not ready for prime time yet. But it will be soon.
While there are challenges, the industry continues to move forward, and as the challenges are addressed, adoption will continue to grow. But one thing is for sure, it will take some time for this new ATM technology to become mainstream.
The role of Banks
Banks and Credit Unions will need to embrace new technology to stay relevant with millennials. Innovative non-bank financial service providers may rise to the challenge and take customers away from traditional banking services if banks do not innovate and adopt new technology. The larger banks are already moving forward with contactless technology but the medium and smaller financial institutions are moving slower.
Industry efforts
The ATM Industry Association and innovative Independent ATM Deployers (IADs) like Prineta that are members of a Consortium for Next Gen ATMs are leading the way towards a standardized interoperable next generation ATM. The consortium was formed to work on the next generation ATM architecture based on a common blueprint that is signed off by the industry’s major deployers, vendors and suppliers. The industry is committed to making this happen and it will be interesting to watch how the ATM evolves over the next few years.
