An increase in mobile-based payments is one major factor prompting the changes in how consumers may access ATMs, but rising availability of contactless cards also is a factor, especially in regions such as Europe where many consumers have and use contactless bankcards for small purchases and public transit.

It remains to be seen whether the trend will spread to the United States, Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, tells PaymentsSource. “It is possible the trend will come to the U.S., but it will take some time,” Ablowitz says, noting the U.S. must have a bigger rollout of mobile payments to increase the chances.

Moreover, many U.S. consumers still identify with the convenience of using mag-stripe cards to withdraw money at ATMs anywhere in the country, Ablowitz adds.

As the mobile-payments market continues to evolve, financial institutions should consider phones for ATM access because so many consumers have mobile phones but may not have a bank account or a bankcard, Ablowitz says, explaining why ATM makers have identified the ubiquity of phones and the potential business case to support noncard access to their machines.

This is especially true outside the U.S., where conversions to chip cards already are necessitating the need to upgrade cash dispensers, he says.

Overall, however, cardless and contactless ATM deployments will depend on the demands within a country for alternative means to access the machines, Ablowitz notes. “The more popular mobile payments become, the greater need there is for ATMs enabling consumers to withdraw funds using mobile phones,” he says.

Moreover, contactless and cardless ATMs enhance the customer experience by providing improvements in security and functionality, Ablowitz says.

Payments Source, May 12, 2011
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