Are the final pieces of the Cardless cash access jigsaw appearing?

There has been interesting news with a major banking platform offering Cardless Cash at ATM’s[1].  Having worked alongside the RBS project in 2006 to launch access to emergency cash in 2007 whist working on the Uk’s first Mobile Contactless trial.  The Cardless cash services have developed from their initial launch in Turkey and in 2012 RBS launched the ‘Get Cash’ mobile app service. 

With these ATM developments and the continued deployments of mobile contactless with Apple Pay, Samsung Pay etc.. the way consumers pay for things is changing.  Contactless payments after a slow start over 10 years ago making inroads as consumers get used to tapping rather than inserting payment cards at devices.  Recently, Barclays started to launch contactless card cash access services in the UK[2]. 

App based card payments using ‘Card of File’ with fingerprint authorisation are also growing in popularity since their launch in 2014.  With these developments what we can foresee is significant changes around the corner for ATM’s from their use of Cards and PINs to access cash service. 

Usually ATM developments have been based on real business benefits rather than regulatory requirements that drive the majority of developments in financial services.  Cardless Cash appears to provide benefits to customers (account holder), ATM operators and the card issuer (account service provider) more than the ATM / card scheme (transaction switching network) This is because the ATM / card scheme are likely to require significant change to their current card based model. 

Therefore, it is likely the ATM / card schemes will develop Mobile Contactless Cash[3] further as the core technology is based on the original payment card numbers currently used to switch transactions to card issuer for transaction authorisation.  This will probably drive contactless card access to ATM services in the short to medium term before Cardless Cash service become the norm.

Finally there other drivers that will influence how Cardless Cash services will develop in the future:

• The international card schemes are lowering contactless transactions costs to displace cash via their established POS networks.
• For Cardless cash based on OTP codes may require a ‘disrupting’ network to drive the ATM switching networks to move away from transactions based on the current card based network.
• Mobile phone and payment technologies continues to develop and may deliver an even better solution for Cardless Cash access.
• The development of crypto counterfeiting technologies to break current card payment transaction protection methods.
• The use of different payment technologies by customers will continue to fragment as the customers demographics change. 
  • Therefore, the potential benefits are unlikely to be fully realised easily in the medium term as some customer demographics may not migrate away from a cards to Mobile devices for payments.
  • There is a need to have a ‘backup’ card to a mobile device for a significant length of time as ATM networks upgrade hardware and software both nationally and internationally.  For example it has taken 15 to 20 years for EMV cards to deploy and most cards are still issued with Mag Stripes[4].

[1] https://www.atmmarketplace.com/news/fis-cardtronics-to-roll-out-cardless-cash-access-at-retail-atms/?utm_source=Email_marketing&utm_campaign=emnaAMC06302017162910&cmp=1&utm_medium=HTMLEmail

[2] https://www.theguardian.com/money/2016/nov/22/barclays-unveils-contactless-cash-withdrawals

[3] Note the assumption for Mobile Contactless is that tokenisation services would be expanded to support ATM as well as POS transactions.

[4] http://news.abs-cbn.com/business/07/11/17/psbank-to-deactivate-non-chip-atm-cards-on-sept-1