Welcome to the era of card-free ATMs, where you can get cash with your smartphone. Major banks like JP Morgan Chase and Bank of America are heading toward the card-free route, while Apple Pay is factoring in as another option to make cellphone ATM transactions easy for iPhone users.
Given the ubiquity of smartphones, it is no surprise that banks would seek this alternative for ATM transactions, so if you lose your wallet or leave your bank card at home, you can still make withdrawals or deposits. Right now, both Bank of America and Wells Fargo are moving to integrate Apple Pay with their machines, Tech Crunch reports. Sources close to both companies told the tech site that engineers at the banks are working on installing Apple Pay options within their ATMs.
Similarly, Chase will introduce new ATMs this year that will enable customers to withdraw cash and complete other transactions by using a smartphone code found within their Chase mobile app.
Soon, this will be the norm across the board, according to CNET Senior Editor Dan Ackerman.
"Instead of taking the plastic card out of your wallet, you take your phone, log into the app -- hopefully biometrically, with like a fingerprint reader on your phone -- and it gives you what they call a 'one-time use code.' So, you type that code in, you log in, and then that code evaporates," Ackerman told CBS This Morning. "It's kind of like that two-factor authentication that everyone should have on their email where they give you that extra layer of security."
Ackerman suggested that this kind of authentication system will gain steam because securing people's data, whether through cards or online transactions, is an increasingly prevalent concern among American customers in the digital age.
"With ATM machines, you hear all the time about 'skimmers.' They take little slots that they put over the ATM card slots where you put your card in, and they steal the stripe data ... maybe through a pinhole camera punch code," he said.
These kinds of threats to customer data make securing ATM transactions a priority, especially given the fact that moving away from a wallet-and-paper money model leaves an easily traceable trail of personal financial data.
"You go to stores now, and you set up a shop and they don't have a cash register. They have an iPad and a card reader," Ackerman said. "The downside is that you don't have the ability to whip out your wallet and pay with cash in a non-traceable way. Young people who don't have bank accounts, who get paid in cash, who are not part of the online connected generation, they will get left behind."
"The phone is becoming the wallet and sort of the key and lock system," he added, citing the rise of the likes of Apple Pay and Samsung Pay, as well as online money-transfer services like Venmo that have quickly become common ways young people, especially millennials, pay for things now.