A partnership between Diebold Inc. and mobile wallet provider Paydiant will allow consumers to use their smartphone, rather than their debit or credit card, to withdraw cash at an ATM. Wintrust Financial Corporation is currently pilot testing the solution in partnership with FIS, Paydiant and Diebold.

The cardless Mobile Cash Access solution offers a convenient and secure option for interactions with their FIS, while FIs the opportunity to offer their own branded mobile wallet solution, Diebold said in a news release. Additionally, Diebold's cardless solution eliminates the threat of card skimming at the ATM. 

The Diebold-Paydiant solution addresses two obstacles to adoption of cardless cash withdrawal: hardware requirements and security concerns. MCA allows financial institutions to provide a secure, bank-branded mobile wallet solution without installing additional hardware on ATMs or point-of-sale terminals.

"Diebold brings a longstanding security philosophy and its own digital expertise to the partnership with Paydiant to offer banks and credit unions the technology consumers are looking for — a bridge from digital currency to physical cash," said Diebold Chief Innovation Officer Frank Natoli. "A bank-branded mobile wallet enables our clients to serve their consumers directly, as opposed to allowing third-party brands to capture the mobile share of a consumer's wallet."

With the cardless MCA solution, customers can pre-stage a cash withdrawal on smartphone devices creating what Diebold termed a "cooperative interaction" with the ATM. At the ATM, consumers authenticate themselves by scanning a unique QR code that signals the ATM to dispense cash via an encrypted connection to the cloud.

"Mobile wallets, like plastic credit cards 50 years ago, will become an everyday functionality for consumers," said Natoli. "Diebold's partnership with Paydiant is a step toward creating a mobile wallet ecosystem that offers convenience and security to consumers directly from their financial institutions."

Pairing the functionality of a mobile wallet solution with the convenience of self-service options at the ATM enhances the consumer banking experience while supporting financial institution loyalty, according to the release. The ability to conduct transactions with a mobile device at an ATM provides the foundation for financial institutions to offer a private-labeled mobile wallet solution that can also be used at retail establishments for everyday purchases.

"Banks and retailers want to keep their consumers within their own mobile applications for doing things like paying for goods and services or accessing cash, rather than allowing other third parties to come between them and their customer relationships," said Chris Gardner, co-founder of Paydiant. "Paydiant and Diebold are fundamentally aligned on this principle."

Read more about mobile banking.