ATMs can be very convenient at times. Only about 20 percent of people carry more than $50 in their wallet, according to The Washington Post. This leaves little leeway for paying someone back, going to cash-only businesses or offering to split a check with a friend.
This is where ATMs come in. Each of the roughly 425,000 ATMs currently in use in the U.S. experiences an average of 800 transactions every month, according to Statistic Brain. Using these machines, people can have instant access to the cash they need. But this doesn't mean ATMs aren't without their flaws.
To retrieve cash from an ATM, you usually need your card with you. If you forget your wallet at home, you are out of luck. Thieves can also outfit ATMs with skimming machines to collect your information. Both of these drawbacks can be avoided if cards are not needed to access a bank account. Cardless cash gives users the ability to receive their cash using their smartphone instead, Payments Leader explained.
Enter: cardless cash
CBS News reported that mobile banking apps that allow users to access cash from an ATM offer consumers more convenience and privacy, in addition to helping them avoid hidden skimming devices.
"I like the app," Bart Johnson, a cardless cash consumer in Chicago, explained to CBS News. "If I don't have my wallet or debit card on me, but I do have my phone, which I always have, I go right to the ATM, put it up to the ATM and get my money."
As more banking options are being made available on mobile devices, cardless cash was a clear next step for financial institutions. As of this year, FIS and PayPal have teamed up to make ATMs accessible to mobile banking consumers at 2,000 machines nationwide, according to a press release from FIS.
"Consumers are looking for experiences that match their increasingly mobile lifestyles, with expectations of better security," Douglas Brown, the senior vice president and general manager of mobile at FIS, said in a press release. "We are excited to help our banks deliver on their brand promise to customers, and exceed their expectations for speed, simplicity and security."
Easy to implement
Between February 2015 and 2016, hundreds of thousands of transactions worth millions of dollars were made across the U.S. using cardless cash solutions. The software is relatively easy to install and doesn't require hardware upgrades.
The solution was also designed to be flexible enough to be added to any mobile app. This means that any credit union would be able to easily adopt the technology and integrate it into their app.
Benefits for all
Cardless cash is easy and convenient, and offers benefits for every party involved, from credit unions to the member to any business that houses an enabled ATM.
Credit unions will benefit by giving its members more options. Members have shown that they prefer financial institutions that make money management as easy and convenient as possible.
Members who take advantage of these options benefit not only from increased convenience, but also from heightened security. It is easy to lose a card, but consumers generally keep a close eye on their phones. But even if a phone is lost, most smartphones add layers of protection including passwords and biometrics like a fingerprint reader. Cardless cash apps that can be accessed from smartphones can also employ these security features to add even more protection.
Payments Leader explained that people can also make money exchanges between family and friends even easier by sharing one-time codes with people who also have the app.
Finally, businesses that house connected ATMs can benefit as well. Statistic Brain noted that a store that has an ATM available usually sees about a 20 percent increase in sales over a store that doesn't have one. Making them even more accessible can only help their model.
As more consumers turn to their phones for money management tasks at a rising rate, it's important that credit unions keep up with the trend. Having a mobile app is a great first step, but including features that make personal finance super easy takes it to another level that members will appreciate. Given that this software is easy to install and simple to integrate into any mobile app, credit unions have nothing to lose in setting up cardless cash options.