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How do cardless ATMs work? Pros and cons

A man uses his phone at an ATM.
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A man uses his phone at an ATM.
ImYanis/Shutterstock
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Cash transactions are on the decline in the digital age, so quick and convenient access to cash may not be something that’s often on your mind. But when you need it, it’s nice to have.

Cardless ATMs allow you to transact ATM business on your smartphone’s bank app. They’re a convenient way to get money from your bank account if you forget your debit card or if you prefer to minimize the number of times you need to touch an ATM’s screen.

What are cardless ATMs and how do they work?

Cardless ATMs provide access to your account and allow you to withdraw cash without the need for a card. Instead, they rely on account verification via text message or a banking app on your smartphone.

There are several ways that cardless ATMs can function. Types of cardless technology include quick response (QR) codes, near-field communication (NFC), verification codes and biometric verification.

QR Codes

To use a cardless ATM with a QR code you first set the mobile withdrawal up on your banking app. The ATM will then display a QR code on the screen for you to scan with your phone before dispensing the money.

Near-field Communication (NFC)

Some services like Apple Pay use NFC, or near field communication, technology. To use NFC at a cardless ATM, open the app on your mobile device, choose the linked bank account you want to withdraw from and tap your phone against the designated reader. To complete the transaction, the ATM will prompt you to type in your PIN (just as if you had inserted your card).

Verification codes

Using a verification code involves opening the bank’s app on your phone and selecting the type of ATM transaction you’d like to perform. The app then provides a one-time code you’ll enter at the ATM as well as your PIN. The code usually expires after a set amount of time, such as 30 minutes.

Once you enter the verification code, your transaction will take place, which can mean the ATM will dispense the amount of money you indicated you wish to withdraw.

Biometric verification

You may use biometric verification to unlock your smartphone by having it recognize your face or fingerprint. Similarly, some banks can store your biometric data so their ATMs can use them to verify your identity for future transactions. This allows you to withdraw cash or perform other functions without having to provide your card.

Pros of using cardless ATMs

1. Simplicity

“Our phone is slowly becoming our wallet,” says Drew Cheneler, founder of SimpleMoneyLyfe. Some consumers don’t memorize their account information and rely on facial- or fingerprint recognition to access their accounts, he says. Some cardless ATM software allows you to do the same.

2. Access to all your accounts

You might not carry all your ATM cards with you, especially if you use more than one bank. Cardless ATMs allow you to still have access to all of your accounts, which can be helpful if you are near an in-network ATM, yet don’t have the corresponding card with you, saving you from having to pay nonnetwork ATM fees.

3. No need to carry a wallet

It isn’t always convenient to carry a wallet, purse or something else containing your cards. Cardless ATMs allow you to perform transactions if you have your smartphone. Another benefit of not carrying your wallet is it can reduce your chances of getting pickpocketed or robbed.

4. Security

Though they aren’t risk-free, a few features of cardless ATM withdrawals make them more secure. For starters, scammers can’t use skimmers to steal your card data because you don’t insert your card into the ATM terminal. Codes generated for cardless withdrawals are one-time use only, so it does a hacker little good to steal one. Cardless withdrawals also often require two-step authentication, so hackers wouldn’t only need to know your PIN, but they would also need to have access to your phone.

5. A more sanitary option

Cardless ATM withdrawals won’t eliminate the need to touch the ATM, yet they do cut down on contact. And the fewer touches the better, considering how many users might touch an ATM and spread germs between cleanings.

Cons of using cardless ATMs

1. Availability

Cardless ATMs aren’t available everywhere. Even if your bank provides the service and your phone is compatible with the technology, you might not find an ATM near you that’s capable of handling cardless withdrawals.

2. Compatibility

Cardless ATMs rely on smartphones to operate. If your bank utilizes an app, your phone must be compatible with that app, or you can’t use it.

3. Phone Security

Though cardless ATM transactions are generally more secure, they pose a different set of risks.

“Since bank cards are being replaced by phones, criminals will now be more enticed to target and hack your phone to mine your data, information and even change your phone and bank app settings,” says Ricardo Pina, founder of The Modest Wallet. You can minimize risk by keeping your phone secure if you have banking apps installed.

Popular accounts with cardless ATM access

Chase, Wells Fargo and Bank of America are all compatible with Google Pay, Apple Pay and Samsung Pay. Since cardless ATM apps from these banks work on each of these three services, they are compatible with both Android and Apple phones.

  • Chase: Chase provides cardless ATM service with consumer debit cards (excluding CPC Privileges card) and business debit cards (excluding Business Associate cards).
  • Wells Fargo: Wells Fargo Debit and EasyPay cards can be linked to a digital wallet and used with cardless ATMs.
  • Bank of America: Contactless transactions can be made using a Bank of America debit card at all the bank’s ATMs.

Bottom line

Cardless ATMs are a convenient, secure and more sanitary way to withdraw cash without a card. They’re also handy for emergencies — even if you don’t use them regularly.

–Staff writer Karen Bennett contributed to this article.

Written by
Brandon Renfro, CFP
Contributing writer
Brandon Renfro, CFP, is a contributing writer for Bankrate. Brandon writes about banking and personal finance advice.
Edited by
Wealth editor