FIS & Paydiant Modernize ATMs By Replacing Cards With Mobile Authentication

Using a card to withdraw money from an ATM is about to become so 20th century. FIS and Paydiant, now a part of PayPal have launched a way to access ATMs with a QR code on a smart phone, which avoids the risk of card skimming and lost or stolen cards while reducing the time standing at an ATM to a few seconds. Coming sometime in the future will be the ability to send the code to a friend or family member so they can withdraw cash from your account through a convenient ATM — a good way to provide emergency funds to a student away at university.

Twenty-eight banks and over 2,000 ATMs are live with the cleverly named Cardless Cash, said  Chris Gardner, chief product officer of PayPal’s Paydiant team. ATMs can be upgraded to work with Cardless Cash by pushing software to them over their network — it doesn’t require sending out a truck and technician.  FIS is enabling the more than 80,000 ATMs it operates and expanding to more ATMs connected through FIS’s NYCE network. iPhone users will be able to achieve biometric access to their accounts at the ATM through the FIS mobile banking app with Apple ’s TouchID. If an iPhone is lost or stolen, it won't provide access because it requires Touch ID; other phones are protected by their passwords; users can also call their bank and block the phone until it is recovered.

This technology provides banks with a new revenue opportunity from transactions at their ATMs because it allows for enhanced digital marketing -- banks have the chance to catch up to Starbucks in offering loyalty awards by leveraging the white-label technology. The Cardless Cash solution was specifically designed to be embedded in any bank’s mobile banking application.

Launched in January 2015, the solution has securely processed millions of dollars in withdrawals and hundreds of thousands of transactions across the United States. Multiple banks – including BMO Harris , Wintrust, WSFS, Salem Five and Avidia Bank.

Customers can set the amount of cash they want to withdraw before they approach an ATM, then press a single button on the phone to request the cash. The receipt comes to the phone, so the time a user  spends in front of the ATM can be as little as 10 seconds.

Although mobile payments, like Apple Pay or Samsung Pay have gained only a small share of the payments process, Gardiner expects that cards on mobile will increasingly displace cards at the POS as consumers grow frustrated with EMV, the security chips in debit and credit cards. Unlike cards with magnetic stripes, which are swiftly swiped through a terminal, the EMV card has to remain in the reader until the transaction is complete.

“EMV will benefit mobile[adoption]. It’s  very unnatural and it takes a long time — it is slow as molasses and pretty much every mobile phone factor is better. Our banks keenly want to make payments easier and better for clients so you will use their payment credentials.”

Paying by phone eliminates a lot of time waste and it can deliver good value in the form of coupons and offers, said Doug Brown, senior vice president and general manager of FIS Mobile.  Major merchants like Starbucks have found a mobile payment app makes payments easier and allows more value-add marketing.

Two UK banks, NatWest and RBS, launched mobile-enabled ATM systems in 2012, although they weren't as slick as the FIS-Paydiant solution.  The UK system let users make a request for payment on a mobile and receive a six-digit code for an ATM that was good for three hours. Users could also send the code to someone else, like a child at university, to get cash.