Cardless cash transactions: What's in it for consumers?
I first saw mobile cash access in action in a demo at the 2011 ATMIA U.S. conference. It was pretty cool. No, way cool.
Having previously written several mobile payments white papers for Mobile Payments Today, I was already enthused about that concept and couldn't wait for it to catch on.
I'm still waiting.
For some time, it seemed that mobile cash access would be slow out of the gate as well, more a nerd novelty than a standard practice. After all, a tiresomely pragmatic friend remarked when I described the ATMIA demo to him, "Why would I do that when I can just use my ATM card?"
Actually, there are several good reasons why, as Douglas Hartung, senior director of global software innovation at Diebold Nixdorf, explained.
"Just as with mobile payments at retail, if you only think about it as replacing a card dip with a phone tap to emulate a card transaction, it is rather limiting and begs the question of customer value," he said. "The value comes into play when considering other potential use cases."
Most compelling is security. In the past four years, high-profile ATM and retail card skimming cases have shaken cardholder confidence in the security of their plastic.
A 2016 study from ACI Worldwide and Aite Group found that, despite a strong safety net of regulatory protections, half of Americans are "very concerned" about the possibility of a data breach resulting in compromised account numbers.
Mobile cash access alleviates this worry, particularly since consumers already invest a lot of trust in the banking system — even if they claim not to like actual banks.
Mobile cash access also enhances the cardholder's physical safety. The technology enables customers to stage their ATM transaction in advance, reducing time spent in front of the machine by as much as 75 percent — from around 40 seconds to around 10 seconds. For many consumers, this increases the feeling of physical security, Hartung said.
Another benefit of cardless cash is that it can enable third-party access to funds — for a child away at college, a family member who lives in another country, or who gets into a jam while traveling abroad. It could be for the account holder who has had a card lost or stolen and needs access to cash while awaiting a replacement.
Security, accessibility, immediacy — all of these have served as persuasive arguments for cardless cash rollouts by some of the largest U.S. banks.
Bank of America, BMO Harris, Chase, Wells Fargo and, depending on which source you consult, up to either two dozen or several hundred other financial institutions across the nation, now offer cardless cash access, or soon will.
What's more, just the institutions listed above account for approximately 50,000 ATMs, or more than a quarter of the bank-operated terminals in the U.S. Not all of them are cardless yet, but having made the commitment to mobile cash access, FIs will be looking to expand the service over time.
The trend is not limited to financial institutions, either. Independent ATM operator Payment Alliance International and fintech provider FIS announced in July they had partnered to bring FIS Cardless Cash to 70,000 ATMs in the PAI network, using the FIS mobile cash platform.
Additionally, HalCash, a Madrid, Spain-based payment authorization, clearing and settlement platform provider, launched an independent cardless cash solution last year in the U.S. under the Pin4 name. The company says it now serves ATM users in 46 states.
At this rate, mobile cash access might achieve ubiquity in a much shorter time than mobile payments, with its (so far) less compelling use, and its ever-changing mosaic of providers all competing for the same consumers' attention.
Of course there are wrinkles to work out, mainly relating to interoperability. But providers are already working on the issue and will figure that out just as they did with the ATM networks. Plus, there's the fact that consumers have always been most likely to use their own bank’s ATMs.
As for expected future demand, it's telling that nonbank players are looking for a place in the cardless ATM scheme of things, Hartung said.
"We are seeing many of the third-party wallet providers beginning to see the value of bridging between the physical and virtual worlds of cash, and bankers are continuing to look for innovative ways to deliver new services to their customer base through existing and lower-cost channels."
He expects to see significant uptake continue over the next 12 months. And indicators point to ready adoption by consumers, as well.
Javelin Strategy & Research found 57 percent of customers who tried cardless ATM access did so more than once. "It shows the overall experience is resonating with consumers,” Emmett Higdon, director of mobile at Javelin and co-author of the report, told one publication.
Meanwhile, for various reasons, probably tied to trust, availability and rewards, repeat use of the Pays — i.e., Apple, Google and Samsung — has been declining. Consumers seem prefer in-app transactions, given repeat use of Walmart Pay (88 percent) and Starbucks mobile payment.
That's good news for banks, as they seek to retain top-of-wallet status with customers. And it's one more reason why the future looks bright for mobile ATM access. And now that it's catching on, I hope my bank won't keep me waiting too long.
Suzanne Cluckey / Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and BlockChainTechNews.com