Cash transactions seem to be in decline in the US, but the need for cash hasn’t disappeared entirely. That’s why banks are utilizing cutting edge financial technology to support cash use in the form of cardless ATMs.
A cardless ATM gives customers the ability to withdraw cash without the use of a debit card. They work similarly to a traditional ATM – dispensing cash following successful identification – and may still have a card reader that can be used if preferred.
Cardless ATMs are equipped with technology needed to securely identify a customer and dispense their cash without the debit card present. This is known as “cardless cash.” The only requirements are a smartphone, a checking account that supports cardless cash, and the bank’s app. Cardless ATMs display a distinctive contactless sticker, so they’re often easy to spot, too.
The main principle of a cardless ATM is to make cash accessible without a debit card. Depending on the account provider, additional security measures are used to allow access to cardless cash: quick response (QR) codes, near-field communication (NFC), verification codes, and biometrics. Let’s take a deeper look at how each one works.
QR codes have become a familiar sight in modern society, as they are frequently used when sending packages or on menus, for example. These small, pixelated squares hold far more information than a standard barcode, but it’s not necessary to know exactly how QR codes work to use them for cash.
To withdraw cardless cash, the user first requests the withdrawal through their banking app. The ATM will then provide a cardless cash QR code to be scanned to complete the transaction.
Most modern smartphones will be equipped with NFC capability as standard, allowing people to use their smartphone as their wallet.
This same technology allows users to share their bank details with the cardless ATM to facilitate a withdrawal, known as an NFC ATM or tap ATM. Simply open the app, tap the phone on the reader, and enter the PIN when prompted, exactly as if the card is present.
A user’s banking app on their smartphone may instead create a one-time cardless ATM verification code when a cardless withdrawal is requested. Enter the code at the ATM to trigger the identification process and complete the transaction. These codes can only be used once and are usually time-sensitive and expire shortly after use.
Smartphones are often equipped with facial recognition software, fingerprint scanners, and even retina scanners as an enhanced way to help keep private information secure. Some banks offer this service, letting customers access their finances with face recognition ATMs. Alternatively, a fingerprint ATM can scan fingerprints as a form of verification if the customer has shared this data with their bank.
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Cardless ATMs and cardless cash may appeal to some and not to others. Like many feats of modern technology, there are potential benefits and drawbacks to consider. Here are some possible pros and cons of cardless cash.
Cash is still king in some parts of modern life, and cardless ATMs provide valuable access to cash without the use of cards. Consumers may prefer cash in certain situations, such as to avoid a card processing fee or if they choose to maintain privacy. Cash could also be useful in an emergency.
But alternatives to cash, like PayPal’s digital wallet, are more important than ever – especially if there’s simply no ATM nearby.
Learn more about the PayPal digital wallet.
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