Cardless ATMs 101

ATMs Now Using Apps

Cardless ATMs 101
August 23, 2016

Imagine that you visit an ATM to withdraw cash and instead of completing your transaction through scanning a card and entering a PIN, you simply tap the screen and scan a code to receive your cash. You don’t have to imagine it; in some locations, you can experience it.

Cardless ATM transactions through mobile apps have already been enabled by a growing number of banks throughout the U.S., including BMO Harris and Wintrust Financial in the Chicago area and Avidia Bank and Salem Five Bancorp in Massachusetts.

Cardless ATM withdrawals work through a mobile app and a corresponding programmed ATM. You can use the app to prepare the basic information for the transaction (the amount, etc.) and upon arrival at the ATM, all you have to do is tap the screen to display a QR code. Scan the QR code with the banking app on your phone, and the ATM will complete the transaction. There's no scanning of your debit card or entering your PIN on the ATM screen.

Expect more banks to adopt this approach. Fidelity National Information Services (FIS), the supplier of the mobile software for the ATMs, expects cardless ATM transactions to be available at over 100,000 locations throughout the U.S. by early 2016. According to a report by, 69% of banks and other financial institutions plan to implement the cardless ATM or other mobile-ATM integration services within the next few years. There are two primary reasons why these services are expanding.

  • Millennials – Mobile apps in general appeal to millennials. Anything that can be done with a smartphone will be done with a smartphone.

While millennials like mobile payment systems, they also like to carry cash (at least in the U.S.). Millennials also do not like to wait (who does?) and cardless transactions are quicker — although a typical time saving is around ten to thirty seconds.

  • Security – Cardless ATMs improve security, since by definition the process prevents card skimming. Card skimming, or the practice of stealing information during an ATM transaction is increasing at an alarming rate. Thieves access your information with a card skimmer planted inside the bank's card slot and acquire PIN information with a separate PIN pad overlay or a hidden camera. According to FICO, skimming of ATMs increased by 174% over the last year for ATMs on bank property and 315% for those located elsewhere.

The cardless ATM transaction is tokenized, sending information that is only valid for the single transaction that is taking place. Tokenization is one of the steps used to secure point-of-sale mobile payment systems and other mobile transactions. Thieves have no incentive to steal the information since it does not contain the baseline card information and PIN that is needed for fraudulent transactions.

Enterprising thieves will eventually find a way to scam cardless ATM transactions, but in the interim, they are going to focus on easier targets. It is similar to the old camping adage when being chased by a bear: "I don't have to outrun the bear; I just have to outrun you."

Cardless ATMs are establishing their place as part of the mobile banking services that financial institutions will have to offer to stay competitive. Barring any sort of massive security failure, which seems unlikely, this technology will be growing rapidly over the next few years.

Eventually, there may be a day when cardless ATM technology is discarded because ATMs become obsolete (along with cash) when mobile electronic payments take over every possible transaction. Until then, enjoy the convenience and improved security of a cardless ATM when it finally arrives at your local bank.

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Erin | 08.23.16 @ 16:34
I don't remember the last time I even used an ATM. I hate cash and use it as little as possible. I'm still not sold on the security of mobile apps (I'd be a good candidate for losing my phone, etc), but if the experts say it's better, I'll have to believe them until proven otherwise.
Kailie | 08.23.16 @ 16:34
This sounds like something I could totally get behind. I think it's rather amazing how far technology has come.
Brittany | 08.23.16 @ 16:35
I haven't had to use an ATM in a long time, but aside from that, I think this is a pretty cool concept.
Steffanie | 08.23.16 @ 16:35
Not a huge fan of using apps. I am still a few years behind. Unlike others, I still prefer cash.
Nancy | 08.23.16 @ 16:37
Today it's scarier to lose your phone than it is to lose your wallet. I'm uncomfortable with banking on my phone.
Carla | 08.23.16 @ 16:40
It seems there is an app for everything now. I have yet to fully embrace this technology but I'm learning.
Zanna | 08.23.16 @ 16:41
I like the whole idea of single-transaction token processes. I'd like to see more of this type of phone payment, avoid cards and skimmers altogether!
Jane | 08.23.16 @ 16:41
Cardless ATM transactions are still open to being hacked wirelessly. It happens with people who swipe credit cards, and the signals are sent wirelessly to a company's server. I hope there is good security measures in place for cardless ATM transactions.
Jo Ann | 08.23.16 @ 16:45
Interesting information. Access to funds just keeps getting easier for those who have technology. But those of us who don't have all that technology it is becoming more difficult for us.
$commenter.renderDisplayableName() | 11.26.20 @ 18:51