Banks are rolling out technology that allows consumers to withdraw cash from ATMs by using their smartphone rather than a debit or credit card. This method has advantages and disadvantages, experts tell Consumers Digest.
Some ATMs use near-field communication (NFC), which allows you to tap the ATM with a phone that’s equipped with an NFC chip, so you can access your accounts. Other ATMs use a one-time code that you enter into an ATM’s keypad along with a PIN, or a bar code or a QR code that an ATM scans.
Alan Brill, who is a senior managing director of cybersecurity at Kroll, which is a consultant, tells us that security concerns are the same when you use your phone at the ATM as they are at, say, a store. Smartphones can be hacked, and even passcodes that involve biometrics, such as your fingerprint, aren’t foolproof because of the rise of smartphone malware, he warns.
The advantage is that consumers typically keep better track of their smartphone than they do their wallet, Brill says. “Also, when a phone goes missing, the user generally knows it quickly and can take steps to freeze accounts and replace the phone.”