New ATMs Ditch Cards for Smartphones, Improved Security
We’ve all heard the nightmare stories about credit/debit cards being copied by thieves, who use your own account numbers and PIN codes to walk away with your hard-earned cash. These crimes are largely accomplished by using a ‘skimmer’, which is a device that looks like the legitimate card reader on an ATM, gas pump or similar transaction point. Once you swipe the card through a skimmer, your sensitive data is sent to criminals instead of your financial institution.
According to the Federal Trade Commission, these kinds of crimes contribute nearly 40% of the $5.5 billion in worldwide credit card fraud every year.
In the opinion of many security consultants, the best way to fight back against skimmers may be to side step the physical ATM/Debit/credit card process altogether.
That’s why BMO Harris Bank, a Chicago-based division of the Bank of Montreal, is rolling out a revolutionary new ATM model that allows account holders to withdraw cash with nothing more than their smartphones. The goal is to eliminate the need to swipe your ATM card, which eliminates the entire reason scammers install skimming equipment in the first place.
Here’s how the new ATMs work:
- Users prepare the transaction on their phone through a secure banking application
- Press the ‘Mobile Cash’ button on the ATM interface
- Scan the ATM screen’s QR code with your phone
- Take your cash
To ensure maximum security, the new ATMs keep all data passed between the phone and the target machine encrypted, and the metadata created for the transaction is deleted immediately after it’s used.
BMO Harris Bank expects to have nearly 900 of the new ATMs installed and running by mid-2015 across Illinois and Wisconsin, and the banking industry will be watching closely to see how consumers react. While some consumers have been hesitant to embrace phone-based payment products recently rolled-out by PayPal, Apple, Google and more, overall adoption trends of mobile payment technologies continues to climb.
If successful, these new ATMs could go nationwide within the next couple of years. A couple of years after that, your debit could be headed the way of the floppy disk.
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