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The Case for Cardless Cash

ATMs going beyond EMV compliance

By Michael Scheibach

The first phase in the U.S. transition to EMV dealt with the implementation of chip-and-PIN-enabled credit/debit cards and POS terminals. Now comes phase two: the upgrading of ATMs to EMV compliance by October 2017, just seven months away. Yet according to Visa’s Marc Cleven, only about 38-40 percent of ATMs are currently compliant. Cleven, Visa’s senior director of EMV implementation, spoke at the ATMIA U.S. Conference, held in Orlando, Fla.

Achieving ATM compliance is daunting for all parties involved: financial institutions, ISOs, ATM suppliers and debit/ATM networks. For financial institutions, which account for 52 percent of the 425,000 ATMs in the U.S. (some 220,000), meeting the October deadline is an expensive undertaking in terms of the requisite ATM modifications to read “smart” cards. In the long run, however, EMV-compliant ATMs may become less necessary because of “cardless cash,” a solution that uses a smartphone rather than a debit card to withdraw money from an ATM.

During a roundtable discussion on cardless transactions, Carol Specogna, vice president, product strategy, Fiserv, addressed her company’s CardFree Cash. Introduced last year, CardFree Cash allows consumers to use a secure token to withdraw money from ATMs using Fiserv’s Accel debit payments network. Another new service, Popmoney Send Cash, enables a sender to initiate a P2P transfer, with the recipient receiving a text or email notification of the transfer and a passcode to obtain cash from a participating ATM.

FIS is also moving aggressively into cardless transactions, entering into a partnership with ATM provider Payment Alliance International to implement FIS Cardless Cash. With this solution integrated into a bank’s mobile app, customers can request money on their smartphone, scan a QR code at the ATM and collect their cash — all without the need for a debit card. Douglas Asad, senior director of mobile commerce, told attendees during the roundtable that FIS Cardless Cash is applicable to banks of all sizes. Among the many benefits are eliminating the need for ATM hardware upgrades for EMV compliance; offering a feature that will attract younger, tech-savvy customers; reducing costs; and establishing the foundation for mobile payment functionality.

Other cardless cash solutions are MagTek’s Quick Codes mobile wallet and Pin4 Cardless Cash. As with FIS, MagTek and Pin4 both have partnered with Payment Alliance International to offer cardless cash at ATMs in the PAI network. The Quick Codes mobile wallet, which generates a one-time token, does not require complex integration; rather, according to the company, Quick Codes works across all major processor networks. Pin4, a new player in the U.S. market, provides cardless cash, person-to-person transfers, promotions and rewards, and other cash disbursements. Robert Niziol, co-founder and head of business development, noted that the Pin4 Cardless Cash solution requires only a “light” software ATM update, with no hardware required.

So what’s ahead? Financial institutions must strive to meet the October compliance deadline, although it is highly unlikely that all ATMs will be EMV compliant by the end of year. At the same, forward-looking banks and credit unions will take a closer look at these new solutions enabling ATMs to perform cardless cash transactions, as well as such innovative advancements as NCR’s Interactive Teller, which transforms an ATM into a self-service branch by combining video banking with remote transaction processing.

Some may question the future of ATMs. But Sam Ditzion, CEO of Tremont Capital Group, reminded everyone in a session on the future of consumer payments that cash is still the most common form of payment. And even though new solutions such as cardless cash will decrease the use of debit cards, they will not decrease the need for cash from ATMs.

 

 

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