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Written by Cyndie Martini
on December 10, 2019

Cardless ATMs started rolling out in 2016. They are now catching on in a big way. Nearly all of the major banks and many of the smaller banks offer cardless ATMs, and they've become a hit with consumers. The mobile phone has become an always present device for consumers. Allowing consumers to utilize services through their mobile phones is yet another way that banks and credit unions are adding convenience.

“Every time a customer walks up to an ATM or into a branch, chances are they’re carrying a phone, and we believe the real power of mobile is the ability to enhance the customer experience at our ATMs and branches,” said Jonathan Velline, head of branch and ATM banking at Wells Fargo, in a statement, as reported by  Money.

So how do cardless ATMs work? There are two main methods — contactless and code-based. A contactless ATM allows the user to tap an NFC-enabled ATM with their phone to verify and complete the transaction. The code-based method presents a barcode (QR code) on the ATM that the user scans using their bank's mobile app. If a barcode is not used, a numeric number is displayed on the app that must be typed into the ATM. Some ATMs may have a dedicated button to press that completes the cardless transaction.

When traveling aboard, users can still transact through cardless ATMs and in their home language. Their bank app will also display any related fees and exchange rate information.

Cardless ATMs add more security since they use the consumer's mobile phone biometrics. The consumer is authenticated through their mobile phone and the ATM.

Cardless ATMs benefit issuers directly as well through reduced operational costs. Lost ATM cards will become a thing of the past with cardless ATMs. Banks will not have to worry about issuing replacement cards, saving money in both labor and card replacement costs.

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