Just a couple of years ago, there was buzz about using cellphones for ATM transactions. Wintrust Financial was an early adopter, and then the discussion quietly dissipated. But, there’s big news.
According to a recent New York Times article, “JPMorgan Chase, which has more ATMs in the United States – 18,000 – than any other bank, has activated this technology on a few hundred machines in four test cities, including Miami and San Francisco. Six thousand more are already upgraded and ready to go.” The New York Times also reports that Bank of America and Wells Fargo plan to introduce cardless options to all their machines by the end of the year.
“The world is going mobile, and mobile drives engagement. Today, many of us rely on our phones for everything,” says Jon Rosner, vice president, digital consumer experience for Fiserv.
According to the Expectations & Experiences: Household Finances survey conducted by Fiserv, 60 percent of consumers said they can’t leave home without their phones. The only items consumers are more apt to say they can’t leave home without are IDs (72 percent) and keys (68 percent).
Is it time to kiss your ATM card goodbye?
“Some say there will be a day when the wallet you carry in your pocket or purse will become obsolete. Technology is evolving in a way that will likely eliminate all our credit cards, store cards, and IDs. We will use our mobile devices as our primary means of commerce and identification. The technology behind mobile wallet combines near field communications (NFC) and applications. Depending on which is used, a user might need to wave their phone near a reader to make a payment or verify identification, or they may open an app and simply click a button,” explains Robert Siciliano, CEO of IDTheftSecurity.com.
While now reportedly, less than 3% of ATMs in the U.S. can handle cardless transactions, some experts believe it could be as high as 25% by year-end.
What’s the advantage of using a cell phone instead of an ATM card?
For one thing, it can be somewhat faster. In an era of speed, speed, speed, bankers are guessing this alone makes it enticing to people with too little time.
Safety is key too. Crooks won’t be able to manipulate ATMs to skim your crucial information and you can take comfort in knowing that a thief would need to have both your mobile device and the log in information to your bank’s mobile app to get their hands on your money. That’s surely a bit of a security blanket. “Fraud rates are significantly lower from cellphone transactions than card withdrawals,” says Jamie Johnson, CEO of FJP Investment.
He loves the idea of cell phones replacing ATM cards. “Currently, when I leave home in the morning, I have my house/car keys, wallet, cellphone and pen. If I could carry one item, that would be great, as there isn’t much room in my pockets. The downside is that the battery on my iPhone is poor and if I were to run out of power, I would not be able to access ATM facilities.”
Much as things are changing, some folks will cling to their ATM cards like gold, and some banks will be very slow to adopt new technology. But eventually, says Johnson, “We will soon live in a world where people no longer carry ATM cards and leave their wallets at home. We’ve already seen society shift from cash to card, and we fully expect an additional shift to having the cell phone replace both.”