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Is a contactless ATM inevitable?

At least one ATM industry stakeholder is betting on the eventuality of a contactless ATM.

U.S. Patent Application Number 102429 — filed on May 6, 2011, and assigned to Bank of America — seeks patent protection for a "contactless automated teller machine." On September 6, 2012, the application was cleared for further review by the U.S. Patent Office. 

The patent abstract describes a broad range of contactless aspects and components that the patent proposes to cover (emphasis added): 

In general, apparatuses, methods and computer program products for receiving a contactless transmission from an external apparatus to an automated teller machine (ATM) are disclosed. An ATM machine is provided that has been equipped with a contactless interface for interacting with an external apparatus such as a debit/credit card, mobile device, and/or contactless transmission equipped stickers.

The patent application includes background information on the ATM transaction:

… [T]echnology has become available that permits for 'contactless' transactions. For instance, a contactless payment is a payment where a customer pays a purchase amount without handing a payment card or a payment device to a cashier at the point-of-sale (POS) and without swiping the magnetic stripe of a payment card through a payment terminal (also sometimes referred to as a POS terminal). Although physical contact between the payment device and the payment terminal may still occur in a contactless payment environment, physical contact between the payment device and the payment terminal is not necessary for transmission of the payment information from the payment device to the payment terminal.

However, to date, automated teller machines (ATMs) have remained 'contact' terminals requiring swiping of a magnetic stripe of a payment card or similar function. The absence of contactless functionality with ATMs in the marketplace is largely due to security issues and the differences in data that must be transmitted and processed versus a typical POS payment terminal. Thus, a need presently exists for a product that permits a user to engage in a contactless transaction with an ATM.

The application goes on to present a summary of the "embodiments" of the invention: 

… Particularly, embodiments of the present invention are directed to an ATM capable of receiving data from an external apparatus via a contactless interface.

In a first embodiment of the present invention, an ATM is provided. The ATM includes a user interface, a memory device, a communication interface and a processing device operatively coupled to the user interface, memory device, and communication device. The communication interface includes a contactless interface. The processing device is configured to execute computer-readable program code to receive a contactless transmission from an external apparatus.

In a specific embodiment, the communication interface is configured to initiate a debit account transaction.

The patent text also describes at length the devices and means (i.e., apparatus) that might be used for contactless transmission — contactless debit and credit cards, NFC-enabled mobile phones, and NFC stickers affixed to mobile phones or bankcards, and others:

In some specific embodiments, the external apparatus is a debit card. In other specific embodiments, the external apparatus is a credit card. In still further specific embodiments, the external apparatus is a mobile device. 

In some embodiments, the external apparatus is a sticker. In such embodiments, the sticker may be affixed to an external apparatus such as a mobile device, a credit card, a debit card, etc. In some embodiments, the sticker may be configured for one-way communication. In further embodiments, the sticker may be configured for two-way communication. 

In a specific embodiment, the contactless interface is a near field communication (NFC) interface. 

Finally, the application offers "a plurality of drawings by way of non-limiting examples," illustrating the contactless transaction environment, the ATM, the contactless interface, the "external apparatus" (e.g., debit/credit card, NFC sticker, mobile phone) and other block diagrams.

The patent process can be notoriously slow — the initial paperwork for the Contactless Automated Teller Machine was filed 16 months before it was even cleared for consideration — so it could be a few years before the patent office decides whether to grant the requested patent. Which would give the industry a little time to come up to speed on EMV before taking on NFC.

The full text of U.S. Patent Application Number 102429 is available at the U.S. Patent and Trademark Office website.

For more on this topic, visit the EMV research center.

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User Comments – Give us your opinion!
  • scott geiger
    What are the implications of BofA holding a patent on contactless ATM for the rest of the institutions out there? Will OEMs have to pay royalties to BofA? Would other FI's?

    A great follow up to this article would tackle those questions.

  • Jonathan Rosenne
    While they are at it, why not patent the wheel or drinking water?
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