NEW YORK–The nation’s biggest banks continue their expansion of cardless ATMs.
The technology allows consumers to use their mobile devices to receive cash at the machines using near-field communications, which enables devices to exchange information wirelessly over short distances. It’s the same technology behind Apple Pay and Android Pay.
JPMorgan Chase, which has more than 18,000 ATMs, has been testing cardless ATMs in four test cities, including Miami and San Francisco, and has 6,000 ATMs now upgraded and ready to go, according to the New York Times. Bank of America and Wells Fargo will also roll out cardless options at all of their machines by year-end.
“It’s about having the choice,” Jonathan Velline, Wells Fargo’s head of ATM and branch banking, told The Times. “If you’ve lost your card or left home without your wallet, chances are you still have your smartphone in your hand.”
But the system comes with risks. One Chase customer recently had $2,900 stolen from her account using the cardless ATM technology, even though the customer herself had never used it. The thief stole the woman’s online banking user name and password, installed Chase’s mobile app on his or her phone, and used it to withdraw cash, the Times reported. Unlike most cardless systems, Chase’s does not require customers to enter their four-digit PIN at the cash machine. Chase said it has since made security changes to add safeguards, although it still does not require use of a PIN.
At Bank of America, customers with compatible phones and a digital wallet app can tap their phone on the ATM’s wireless pad to authenticate their identity, according to the Times (more information can be found here).
According to the Times report, Wells Fargo is also testing NFC and adding the hardware it requires to all of its cash machines. Currently, however, it issues one-time access codes after customers log in to Wells Fargo’s mobile app and request one. The code is good for 30 minutes.