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How do cardless ATMs work? Pros and cons

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

Cardless ATMs, which allow you to transact ATM business on your smartphone’s bank app, are a convenient and tech-savvy way to get money from your bank account if you forget your debit card or want to reduce the amount of times you touch a screen in the middle of a pandemic.

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 physical card. Instead, cardless ATMs rely on account verification via text message or a banking app on your smartphone.

There are a few different ways that cardless ATMs function. The two main types of cardless technology are quick response (QR) codes and near-field communication (NFC).

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, you need to 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 then prompt you to either type in your PIN (just as if you had inserted your physical card).

What are the pros of using cardless cash?

1. Simplicity

“Our phone is slowly becoming our wallet,” says Drew Cheneler, founder of Simple Money Lyfe. He notes that some people don’t memorize their account information and rely on facial recognition or fingerprints to access their accounts. Some cardless ATM software allows you to do the same.

2. Access to all of your accounts

If you have accounts at multiple banks, you probably have one that you use most frequently. You may not even carry the other bank cards with you all the time, especially if you’re traveling for work or on vacation and trying to travel light. Cardless ATMs allow you to still have access to all of your accounts. That’s especially helpful if you aren’t near an in-network ATM for one account, but are for another, since out-of-network ATMs often have higher fees. So the convenience of cardless ATMs could also save you a few bucks. Having access to all of your accounts could save you quite a bit in ATM fees by giving you flexibility to choose an account that has in-network ATMs nearby.

3. No need to carry a card at all

It isn’t always convenient to carry a wallet, purse or something else to hold your physical cards. All you need is to grab your smartphone if you’re going for a jog or a walk through the neighborhood. If you decide to grab some money on the way home, cardless ATMs give you that option.

4. Security

Although 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. Since the codes are one-time use only, it does a hacker little good to steal it. Cardless withdrawals also often require two-step authentication. Not only would hackers need to know your PIN, they would also need to have your phone and know how to access it. Not lugging your wallet with you all the time, also reduces the chances of being pickpocketed or robbed.

5. Cleaner

While cardless ATM withdrawals won’t entirely eliminate the need to touch the ATM, they do cut down on contact. And the fewer touches the better, considering how many people might touch an ATM between cleanings; especially during the current COVID-19 pandemic.

What are the cons of using cardless cash?

1. Availability

Cardless ATMs aren’t available everywhere. Even if your bank provides the service and your phone is compatible with the technology, you still need an ATM capable of handling cardless withdrawals. That may limit you some depending on the availability near you.

2. Compatibility

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

3. Phone Security

While 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. So, make sure you keep 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 at 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), business debit cards (excluding Business Associate cards) and Chase Liquid cards.
  • Wells Fargo: Wells Fargo Debit and EasyPay cards can be linked to a digital wallet and used with cardless ATMs.
  • Bank of America: Consumer, U.S. Trust, and small-business debit cards are all eligible for cardless ATM use.

Bottom line

Cardless ATMs are a convenient, secure and clean way to get access to your cash without a card, and they can be handy in an emergency even if you don’t use them regularly.

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