What are cardless ATMs?

Cardless ATMs allow customers to withdraw cash using their smartphone instead of a physical debit card. They use digital authentication methods for better convenience and security.

• Cardless ATMs use technologies like QR codes, NFC, or verification codes to identify users securely.
• Most major banks offer cardless ATM capabilities, such as digital check deposits, through their mobile apps.
• These systems can provide enhanced security compared to traditional card-based withdrawals.
• Users may need a smartphone with their banking provider's app to use cardless ATMs.

The most recent data from the Federal Reserve indicates that cash transactions halved in the U.S. between 2016 and 2021, but the need for cash hasn’t disappeared entirely.¹ In fact, the same report shows that the average number of cash transactions has held steady since 2021. That’s why banks use cutting-edge financial technology to support cash use via cardless ATMs.

In a world where digital transactions reign supreme, the humble ATM is getting a high-tech makeover. Cardless ATMs allow cash withdrawals with just a smartphone. As contactless phone payments continue to transform how we handle money, these next-generation ATMs provide convenience without sacrificing security.

For the modern professional juggling multiple financial demands, cardless ATMs allow users to enjoy a digital-first lifestyle while accommodating those moments when only cash will do.

Read on to uncover how to use a cardless ATM, why they're useful, and how to find a cardless ATM to try.

What is a cardless ATM?

A cardless ATM allows users to withdraw or deposit funds without using a physical debit card. These machines use authentication technology, like near-field communication (NFC), to authorize a user before granting access to the account. Many traditional ATMs support cardless functionalities so users can access their accounts even without their debit card.

How do cardless ATMs work?

Traditional ATMs use the presence of a debit card and prompt users to enter a PIN to authorize transactions, while cardless ATMs use other verification methods to authorize users without a physical card. Let’s take a deeper look at how these technologies work.

The most common contactless ATM methods are:

• QR codes: QR payment codes work similarly to bar codes but are more complex. Cardless ATMs can generate a unique code for each transaction, which the user scans with their phone to confirm their identity before using the ATM.
• NFC: Most modern smartphones come standard with NFC payment capabilities. This is the same technology users use for secure contactless payments. Tapping the user's phone at the terminal on an NFC ATM, also known as a tap ATM, shares their bank details. After they enter the correct PIN, they can make a transaction.
• Verification codes: A user’s banking app on their smartphone may use a one-time verification code when a cardless withdrawal is requested. Enter the code at the ATM to trigger the identification process and complete the transaction. Consumers can only use these codes once because they're time-sensitive and expire shortly after use.
• Biometric verification: Smartphones and banks often use facial recognition software, fingerprint scanners, and even retina scanners as passcodes or payment verification to make purchases or use cardless ATMs.

How do I use a cardless ATM?

Some banking providers may require customers to set up advanced security features before using cardless ATMs. However, this is typically a quick and easy process:

1. Download your banking app and create an account. Check if the banking provider offers cardless ATM functionality via the app or call them directly.
2. Add all debit cards and bank accounts to your digital wallet. Some smartphones support this automatically, such as through Apple Pay or Samsung Pay. Some banking tools have their own integrated wallets to help manage money.
3. Add money to a bank account to ensure there are enough funds to withdraw or use a credit card for a cash advance. Keep in mind that these advances typically have much higher interest rates than other credit transactions.
4. Use the banking provider's app to enable cardless transactions and ATM use. They might verify authorization via multi-factor authentication (MFA), even if users simply add a card to their phone's native digital wallet.
5. Locate a cardless ATM via the banking provider's app or website. Cardless ATMs typically have a sticker to identify which machines support these transactions.
6. Open the digital wallet and scan the smartphone at the NFC terminal. Some banking providers require users to initiate a cardless transaction in the app first.
7. If required, scan the QR code displayed on the cardless ATM or enter the verification code as prompted.
8. Enter the account PIN on the ATM and complete the withdrawal as usual.

Advantages and disadvantages of contactless ATMs

Cardless ATMs and cardless cash may appeal to some, but not everyone is on board. Here are some possible pros and cons of cardless cash.

Pros

• Doesn't require a physical card
• Enhances transaction authorization
• Completes transactions quickly
• Reduces the risk of card skimming
• Provides access to multiple accounts

Cons

• Requires a compatible smartphone
• Has limited availability at some banks
• Depends on phone battery and connectivity
• Increases risk if smartphones are lost or hacked
• May have transaction limits

Contactless ATM advantages

Contactless ATMs make banking on the go simple and easy. Whether users often forget their cards or want to travel light, these machines give them that freedom.

• No need to carry a card: The main advantage of a cardless ATM is that cash is available without a card, so forgotten wallets aren't an issue. Cardless ATMs also allow the user to access all their accounts, even those with cards that usually stay at home.
• Extra security: When customers don't need to use a physical card to access their accounts, banking tools need more security. Identification processes for cardless ATMs require the user's smartphone, verification codes that expire, and biometrics to ensure security. They also reduce security risks associated with debit cards, such as card skimming.
• No additional costs: Banking apps are typically free and enabling cardless withdrawals generally won’t incur any extra costs. Simply use the app instead of a debit card. This could vary depending on the bank.

Contactless ATM disadvantages

Contactless ATMs also have their faults, just like any other modern convenience. From different hacking risks to making a lost phone a bigger problem, here's what users should know:

• Compatibility issues: Without a compatible, working smartphone, it is impossible to use a cardless ATM. This creates issues if someone’s phone is prone to crashing, runs out of battery, or becomes damaged.
• Location: Cardless ATMs aren't as common, unless the ATM is located at a major bank. They may be harder to find, so leaving home without a wallet or purse requires advanced planning.
• Smartphone security: As smartphones store more personal and financial data, they become increasingly attractive targets for digital wallet fraud. Never share banking login details with anyone, use anti-virus software, and remain vigilant when using unfamiliar websites or public WiFi.

Where can I find a cardless ATM near me?

Cardless ATMs are becoming more common at major banks across the United States. Most banking apps include ATM locator tools that help users find nearby cardless-enabled machines. Additionally, cardless ATMs typically display the contactless symbol, making them easy to spot.