Believing that smart phones someday will consign wallets and the things they carry to the Smithsonian Institution, Payment Alliance International Inc. has partnered with MagTek Inc. to offer cardless ATM withdrawals and point-of-sale purchases with mobile phones.
As part of the partnership between the two companies, MagTek, a Seal Beach, Calif., manufacturer of electronic devices for secure transmission of PINs, cards and checks, plans to deploy its Qwick Codes Mobile Wallet across Payment Alliance International's network of more than 50,000 ATMs nationwide.
Mobile phone owners who enroll in Qwick Codes Mobile Wallet will be given a Secure Card Reader Authenticator that attaches to the Android smart phone, a personal computer and an Apple iOS device, which includes the iPhone and iPad. It is not yet clear how Payment Alliance, which is based in Louisville, Ky., will distribute the Secure Card Reader Authenticator to customers, said Donna Embry, senior vice president for Strategic Development. MagTek will be selling the Authenticator online, and the company also is considering selling the machine at some big box retailers, said Andy Deignan, MagTek vice president of Global Marketing and Strategy,
Cardholders swipe their debit card or another payment card through the Secure Card Reader Authenticator, which captures magnetic stripe data, generating a single-use six-digit number. Card data is never stored on the owner's phone, Deignan said.
On its website, MagTek said, “Consumers can generate an unlimited number of Qwick Codes that they can securely store in their Qwick Codes Mobile Wallet. They set the dollar limit, an expiration date, even a password/PIN for a second factor of authentication.”
The cardholder then goes to a Payment International ATM, which has a button for the Qwick Codes Mobile Wallet. He pushes the button and types in the six-digit number, or token, and his four-digit debit-card PIN. This enables the customer to withdraw cash from the ATM.
“Qwick Codes Mobile Wallet eliminates the need to swipe cards at the ATM,” Embry said. Qwick Codes eliminate the need for consumers to physically carry a payment card, officials of both companies said. Consumers also can hold their phones up to an NFC-equipped point-of-sale terminal to make purchases. And consumers can pay a debt by giving a person owed funds a six-digit code, Embry said.
MagTek Qwick Codes eliminates static card data, effectively eliminating the risk associated with compromised ATMs rigged with card skimmers, Deignan said.
It is not clear about the number of Payment Alliance ATMs that will support Qwick Codes because the introduction is a work in progress.
Payment Alliance will introduce Qwick Codes Tuesday at the Electronic Transactions Association Annual Meeting & Expo, which begins Tuesday in San Diego. In addition, Payment Alliance and MagTek will be involved in beta tests with Qwick Codes in several locations, which Payment Alliance officials are still considering.
The planned deployment of ATMs that accept cardless transactions follows similar developments elsewhere where mobile phones are used to withdraw cash from ATMs.
First National Bank in Johannesburg, South Africa, allows customers to withdraw funds from the financial institution’s ATMs through cardless transactions. The bank’s ATMs feature a cardless transaction button.