BMO Harris Bank, a unit of Canada’s Bank of Montreal, launched the U.S.’s largest cardless ATM network on Monday (March 16) with the goal of reducing fraud and lowering transaction time.
The cardless ATM system will allow account holders to prepare their transaction before arriving at the ATM by logging into their banking app and pre-selecting the amount to be taken out. Upon arrival at an ATM the user can then hit the mobile cash button, and after allowing the machine to read a QR code on their smartphone, consumers can take their cash and go.
The whole transaction is 30 seconds shorter than a typical card-based ATM experience, and by keeping the information on a device it vitiates the potential of skimming at the ATM.
“There’s no way to skim the card,” said Tom Ormseth, head of digital channels for Wintrust. “They don’t just have to do it at the walk-up ATMs, you can also use it at the drive-thru.”
Wintrust Financial Corp., which operates in the Chicago area and southern Wisconsin, offers the service on its nearly 200 ATMs. It began rolling out the service last August.
Information passed between the phone and the ATM is encrypted, and upon completion of the withdrawal transaction metadata is erased according to bank officials. The service can also be tied to biometric security features present on some smartphones.
“We know that there have been instances in the past in the financial sector where there has been skimming,” said Connie Stefankiewicz, head of North American Channel Strategy and Solutions at Bank of Montreal. “Cards get lost. Cards get stolen. PINs get skimmed. All of those things are actually mitigated by the use of the smartphone.”
All in, $1.7 billion was lost to general-purpose debit, prepaid and ATM fraud totaled in 2014, according to the Federal Reserve.
Device-based cash services initially will be available on 750 ATMs — by June that will have gone up to 900. BMO Harris Bank has more than 2 million personal and commercial customers, 600 branches and more than 1,300 ATMs.
Additionally, BMO Harris Bank opened its first “smart branch” in the Chicago area concurrent with the mobile ATM rollout. The “teller-less” banking centers house ATMS that allow customers to communicate with remote tellers via video conference. This theoretically allows round-the-clock banking and allows basic transactions.
Four similar locations are planned for the Chicago area later this year.
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