Going cardless at the ATM catches on

Banks are rolling out NFC and other tech at ATMs to work with smartphones

wells fargo

Wells Fargo and other banks are gradually enabling smartphones to access cash and make other transactions at ATMs.

Credit: Wells Fargo

Several major banks in the U.S. now support the use of a smartphone to withdraw cash from an ATM -- many by way of Near Field Communication (NFC) technology -- instead of requiring customers to use a bank card.

One of the early adopters, Bank of America, said this week it currently supports cardless technology at 2,800 of its ATMs. That number will reach 8,000 ATMs by year's end that rely on NFC and other technology. Bank of America, which has about 15,000 ATMs nationwide, created a video to show how a smartphone loaded with the bank’s mobile app can now withdraw cash from some ATMs.

Wells Fargo said it has a "handful" of ATMs that are NFC-ready and working to deliver cash and other transactions and is planning to reach 5,000 by the end of 2016. A total of 12,000 ATMs will be enabled in 2017.

JPMorgan Chase said it also will have many cardless ATMs available this year, but didn't specify how many or when. Initially at Chase, customers will show up at an ATM and type in a numerical code they acquired wirelessly through use of the Chase smartphone app to get their cash. That numerical code verification process will be an early step in rolling out cardless technology at the bank's nearly 15,000 ATMs.

In addition to using NFC or a numerical code to authenticate a transaction, some bank ATMs are expected to rely on scanning a QR code displayed on a phone.

The number of ATMs supporting cardless cash remains a small portion of the estimated 500,000 ATMs in the U.S. Crone Consulting, which monitors the mobile payment industry, recently said it expects about 95,000 ATMs in the U.S. to support cardless cash by year's end.

The growth in cardless cash at ATMs is ironic, given that mobile payment technology is designed more for payments at stores, on trains and other locations with a quick swipe of a phone and without the need for cash.

But bank officials said there is still a strong interest in cash, especially in the U.S. "People still use cash and we don't see that going away or lessening," Jim Smith, head of virtual channels at Wells Fargo, said in an interview.

Banks and analysts admit that mobile payments have been slow to catch on in the U.S. However, banks see cardless cash at ATMs as another way to accommodate consumers who use their smartphones repeatedly every day for a variety of tasks.

"Consumers are living a large part of their lives with their phones right alongside them, so it's really critical to continue to help them do their banking that way," said Paul Hartwick, a spokesman for Chase. "In the past, banks looked at each other for deciding what's next and now we are looking at things like Uber and other experiences that people are used to having on their devices. People are not judging us against other banks, but based on all the apps on their devices."

In that spirit, banks see cardless ATMs as an added feature atop a roster of mobile banking services they support in their own custom mobile banking apps.

Bank of America, Chase and Wells Fargo all have banking apps for smartphones -- many of them first developed years ago -- that support various features such as making payments and check deposits using the phone's camera. They also support popular mobile payment apps like Apple Pay, Samsung Pay and Android Pay by allowing their bank cards to work with those apps.

But there are limits. For example, the Wells Fargo Wallet app has just been updated to support Android phones with NFC, but it does not support the iPhone. However, Wells Fargo does support Apple Pay. The advantages of the new Wells Fargo Wallet for Android include the integrated ability to see the balance on the card being used for an in-store mobile purchase, both before and after the purchase.

Bank of America recently announced its Bank of America Mobile 7.0 update for Android and Apple devices. New features include FICO credit score access and Spanish language support. The app has 20 million mobile users.

Even with such improvements to the Bank of America Mobile app, bank customers still need to carry paper currency or deposit multiple checks at once -- functions its ATMs offer that can now be accessed with a smartphone, said Hari Gopalkrishnan, managing director of client facing platforms technology for Bank of America.

As Bank of America has rolled out NFC capability on ATMs, it has had to tweak the technology and user experience, he said.

"It was test and learn," he said. "With regard to user behavior, people learned you have to wave the phone in a certain way at the ATM. There was user-adoption teething pain. We've come up with better error messaging and we're learning a lot. We're driving awareness and how to actually use it, since people are used to swiping their cards at the ATM."

Eventually, he said, "people will use the ATM just like you expect the printer to work."

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