Advantages And Disadvantages of Cardless ATMs

What Is a Cardless ATM?

With cardless or contactless ATMs, you can withdraw money without a plastic card.

The use of cardless ATMs is on the rise. Thanks to technology like QR codes and mobile apps, cardless ATMs allow customers to withdraw money without having to swipe, insert or tap with a plastic card.

How Do Cardless ATMs Work?

A cardless ATM, also known as a contactless ATM, lets you access your bank account and withdraw money without using a plastic debit or ATM card. Cardless ATM access provides the same options you'd enjoy with a physical card – the same types of transactions and the same withdrawal limits.

To take advantage of cardless ATM transactions, you generally need to have your bank's mobile app installed on your mobile device or your card information stored in a virtual wallet.

Cardless ATMs normally rely on one of these types of technology:

Near-field communication. This technology enables a mobile device to "talk" with a nearby ATM. NFC technology also lets you tap and pay with your phone at stores. To use NFC at an ATM, log in your bank's mobile app, select your account, tap your phone against the ATM and provide your PIN. NFC-enabled Apple Pay, Google Pay and Samsung Pay digital wallets generally can be used at cardless ATMs.
QR codes. Using your bank's mobile app, scan the QR code on the ATM's screen and withdraw cash.
Biometric verification. Relying on fingerprint or facial recognition, an ATM equipped with biometric technology verifies your identity and then allows you to withdraw cash without inserting a plastic card.

Advantages And Disadvantages of Cardless ATMs

As with any technology, cardless ATMs come with pros and cons.

Advantages of Cardless ATMs

Ease of use. ATM transactions become simpler when you don't need to use a plastic card and can rely on a mobile app or digital wallet.
No wallet needed. If you forgot to take your physical wallet with you, including the debit card tucked inside, you can access a cardless ATM as long as you've got a mobile device and a banking app or digital wallet.
Fewer germs. Because you're using contactless technology, you may be able to decrease the number of times you touch the ATM. In turn, this could mean you come into contact with fewer germs.
No extra cost. You shouldn't be hit with a special fee for simply using a cardless ATM.

Disadvantages of Cardless ATMs

Availability. The area where you live or that you're visiting may have few cardless ATMs or none at all, or your bank might not offer cardless ATMs.
Tech glitches. Your phone may not sync with the apps or technology that are key to using a cardless ATM.
Tech resistance. You might prefer to withdraw cash the old-fashioned way at an ATM, with a plastic card, rather than fiddling with contactless technology.
Device security. If your phone is lost or stolen, someone may be able to access your digital accounts unless you've properly safeguarded your device.

Banks That Offer Cardless ATM Access

Banks offering access to cardless ATMs include:

Bank of America
Capital One
JPMorgan Chase
U.S. Bank
Wells Fargo

How to Use a Cardless ATM

The steps for using a cardless ATM vary depending on the financial institution and the kind of technology the ATM uses. Generally, though, here's how to make a withdrawal from a cardless ATM:

Open your mobile app or digital wallet. At the ATM, open your mobile app or digital wallet to start your transaction. If you're using a digital wallet, pick the virtual card you want to use.
Tap the ATM or scan the QR code. At an NFC-equipped ATM, tap your phone on the ATM's contactless symbol on the ATM. To use the QR function, scan the code with your phone's camera. Regardless of the method, you might be directed to verify your identity.
Enter your PIN. Next, enter the PIN for the card associated with the account you're withdrawing cash from.
Finish the transaction. Complete the withdrawal and take your cash.

Cardless ATM Security Risks

Overall, cardless ATMs are considered safer than traditional ATMs due to their enhanced security.

For example, a cardless ATM helps reduce the possibility that a fraudster uses the "skimming" method to set up cameras on an ATM to capture card numbers and PINs.

Meanwhile, some cardless ATMs use two-factor authentication, which boosts security. In addition, verification codes for cardless ATMs expire and biometrics (such as fingerprint and facial recognition) are unique to each ATM user.

However, cardless ATMs might be vulnerable to what's known as account takeover fraud. By tapping into someone's digital wallet, a fraudster can take over someone's accounts, make small changes such as changing a password or adding an authorized user, and then carry out unauthorized transactions.

And despite two-factor authentication, verification codes and text message verification typically used with cardless transactions, it's still important to take steps to protect access to your personal information and account funds when using a cardless ATM. Changing passwords frequently, updating sign-in information and keeping a close eye on banking information can help protect your information.

Of course, it's also wise to follow normal safety protocols when visiting a cardless ATM, such as being especially cautious about withdrawing cash at night and staying away from ATMs that aren't in well-lit spots.