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Tuesday, 20 January 2015

Tech Update: The Future of the ATM, With or Without Cards

There are so many ways to shop these days, so many ways to pay for stuff, so many ways for other people to get their hands on our money. Credit cards, debit cards, store cards, contactless cards, pre-loaded cash cards for foreign travel, mobile phones and apps, online shopping, and God forbid, if all else fails, cheques. We can shop online; we can buy stuff from internet or TV shopping auctions using our cards or PayPal accounts. But, let’s face it, in spite of all this new-fangled technology, where would we be with good old-fashioned cash? How long could we survive in the urban jungle without some actual money in our pockets?  And where do we get that cash from? Yep, that’s right, from that wonderful and ubiquitous invention of John Shepherd-Barron, the ATM or cashpoint machine.  Click here to read the story of its origins.

We are so molly-coddled in our safe and comfortable 21st Century western society! We expect to have constantly available channels of communication via text, email and phone.  We always have our smartphones and GPS at the ready to keep in touch with work, family and friends, to tell us where we are and what is happening. Heaven help us if we stray too far from civilisation and can’t get a broadband connection. We might actually have to talk to a real person! We might have to put up with being alone with our own thoughts for an hour or two! 

 Is it just me, or is it really annoying that some people can’t do a bit of simple grocery shopping without help from their phone? Can they not just make a simple decision about which brand of baked bean to purchase without consulting their partner?  How do these people manage when they have to make a major life choice about where to live, what job to do or which house to buy? Their brains must be going into meltdown at moments of real stress, poor souls!  How I long for the days when you could go on holiday for a couple of weeks and survive perfectly well without any recourse to the telephone, TV, laptop, tablet or facebook.  As a student in the 70s, nobody would bat an eyelid if I went travelling in the summer holidays and did not contact my friends or family for a couple of months. They just assumed I would be fine, and I was.

But I digress.  As I already mentioned, the ATM is now ubiquitous. Back in the early days, you had to go into a bank to access a cash machine, or at least loiter outside one.  Now they are part of the furniture of every street, shopping mall and railway station. And very useful they are too.  There are lots of clever people working for the banks and tech companies who are constantly thinking up ways to make it even quicker and easier for us to get our hands on our dosh, move it around, or send it to other people, not to mention to spend it even more quickly then ever before, a cynic might say.

Since we are now habituated to having easy access to all those ATMs, we may as well use them to the max. So why not use them as a method of transferring cash abroad? Why not set them up so we can get money out via an app on our smartphone? Or just by tapping in a code, with or without a plastic card or a phone? Or by fingerprint or iris recognition? The potential benefits are clearly increased speed and convenience, but the potential drawbacks need to be considered too. 

Security is always the main concern.  Hackers and skimmers are resourceful people, and they are good at sabotaging ATMs by attaching cleverly-disguised bits of hardware to capture your PIN number. This can be done by the simple expedience of filming your hands on the keypad with a hidden webcam.  The security risk is clear: if it is possible to get at your cash using a code alone, without the need for using it in tandem with a card, hackers and criminals can get at it more easily too.

As things stand, I can’t see why anyone would want to move to a completely cardless ATM system, but it could be useful in certain ‘one-off’ special situations, for example:-

Emergency Cash
Some banks now offer a handy ‘Emergency Cash’ service.  To access this facility you usually have to phone up and report your card lost or stolen.  You will then be given an emergency code number which you key into the ATM,  enabling you to withdraw cash without using a card.  What a great idea: it means you no longer have to wait till the replacement card arrives to get some cash.

To Transfer Money Abroad
You make arrangements with your bank to send cash to a friend or business partner in a different country. By setting a special access code, they can withdraw an agreed sum of money from your bank account, and pick it up at a convenient cash machine without the need for a debit card, simply by using the special code or alternatively, using biometrics.

With or without a plastic card, in addition to cash withdrawal, ATMs are also already being deployed to offer a range of other customer services, such as mobile phone top-up, bill payment and charitable donations.

Obviously, banks and ATM providers are well aware of the rise and rise of the smartphone, and are keen to incorporate it into the ATM network. There are already plenty of mobile apps around which effectively replace the plastic debit card and enable you to make a payment or withdraw cash form an ATM. Future apps are planned to make use of the data about the customer’s location and spending habits to present them with tailored and targeted special offers from local shops.

All of this technology is still very much in its infancy or even still in development, and most banks and ATM providers have yet to fully work out a long-term strategy for implementing cardless ATM systems.  I guess there’s just a lot more stuff available to spend our money on these days too, more temptation than ever before. There were no smartphones, tablets, computer games back in the 60s and 70s. We were happy enough with just a space hopper and a yo-yo, and if our parents could stretch to it, a chopper bike. Blue Smarties hadn't even been thought of! 

Now it seems we need specialist assistance to spend fast and get hold of those high-tech goodies in double-quick time! OK, I know, it’s not for me to say if it’s good or bad to live like this; I am just an old techie turned credit card blogger, but I can’t help having these cynical Luddite thoughts. I’d be really interested to hear from any readers who are working on this technology right now, or anyone with positive or negative experiences of using mobile banking apps.

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