Several months after rolling out a solution that enables ATM transactions from smartphones, the Boston-based mobile payments provider Paydiant has gained a patent on the technology.

The cardless cash access solution has already been deployed by Wintrust Financial Corp. and City National Bank in partnership with FIS and Diebold. Both banks are FIS customers. Paydiant is a white-label solution provider, and the software solution can be embedded into mobile banking apps through Paydiant's software development kit. Because it is software-only, it can be deployed without installing additional hardware on ATMs, the company said.

Paydiant co-founder Chris Gardener described the solution in an interview with Mobile Payments Today. To prestage an ATM withdrawal from a smartphone, customers log into their mobile banking app and make a cash withdrawal request, which is stored in the cloud. The mobile device obtains an ATM code or token, which associates the end-user and his or her payment accounts to the ATM transaction.

The user then goes to a participating ATM machine, selects a mobile tab and waits for a QR code to appear. The customer scans that code with a smartphone, signaling the ATM to dispense cash through an encrypted cloud connection.

Gardener said the solution is a substantial improvement over others that require users to get a one-time-use code on their smartphone and key it into an ATM with other user credentials. The Paydiant solution is more secure, he said, and eliminates "shoulder surfing" — someone looking over the user's shoulder to observe log-in information — and PIN skimming.

The process is also faster than accessing an ATM via debit or credit card, he said — about 9 seconds compared to 20 seconds on average. "For consumers, it adds convenience and security," he said. "And it's a huge win for banks. It's yet another sticky feature in their mobile banking app," along with features such as remote check deposit and peer-to-peer payments.

The patent — U.S. Patent No. 8,632,000 — is Paydiant's second, following one granted in February 2013 for a mobile contactless payment and mobile wallet solution for conducting payments in-store, online and for pay-at-table transactions. That solution is currently deployed in partnership with prominent card-issuing banks, retailers, restaurants, merchant processors, debit/ATM networks and POS providers, Paydiant said in a news release.

Getting technology patented is important because it protects Paydiant and its customers from patent trolls, Gardener said. "We haven't had anyone balk at using the solution because it wasn't patented," he said, "but it's another layer of protection. It gives our customers some peace of mind."

To watch a video demonstration of the solution, click here:

Learn more about ATMs and mobile banking.