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ATM and Mobile Executive Summit 2013: The business case for ATM-mobile integration

Mobile-ATM capability could become an important strategy for FIs in attracting and retaining customers, expert panel says.

October 11, 2013

by Robin Arnfield, contributing writer

Senior U.S. payments industry executives shared their views on integrating ATMs and mobile devices in a panel discussion at the first annual ATM & Mobile Executive Summit in Washington, D.C.

ATM-mobile integration offers financial institutions opportunities to improve customer service through applications such as e-receipts and mobile cardless ATM access, attendees heard.

"For financial institutions, customer service provides a strong business case for mobile-ATM integration," said Peter Shortall, senior managing consultant at MasterCard Advisors.

But Shortall recognized that for ISOs, the mobile-ATM integration business case is challenging because of the cost of implementing the technology and the lack of incremental revenue. "For ISOs, mobile-ATM integration isn't about customer service, but about economics," he said.

Despite the benefits of mobile-ATM integration, U.S. financial institutions haven't been investing in the technology so far. Past pressure to comply with regulations such as ADA, Durbin and Reg E has meant that financial institutions haven't been able to focus on ATM-mobile integration, said Dave Willis, senior vice president of debit cards and funds services, at Navy Federal Credit Union.

Shortall warned that a lack of industry standards will hinder adoption of mobile-ATM applications for off-us ATM transactions. Without common standards, mobile-ATM services such as cardless access may be restricted to on-us transactions.

Looking to the future, Mark Critchett, NCR Corp. marketing director of payments and multichannel solutions, believes mobile payments will be a marketing differentiator for financial institutions. "Consumers are going to start deciding which bank to choose based on the mobile payment service that a bank offers," he said. "Today, remote deposit capture is hot, but within a few years mobile payments will be big."

Wayne Malone, head of Citishare and global ATMs at Citi global retail group, said customer retention will be a key driver for mobile-ATM integration. "With the enforced Windows 7 ATM migration, financial institutions have an opportunity to add mobile capabilities at their ATMs," he added.

E-receipts

Critchett said e-receipts emailed to a smartphone are a relatively easy mobile-ATM application to implement. "E-receipts are low-hanging fruit," he said. "NCR and its competitors are talking to the ATM network switches, because we want to make e-receipts ubiquitous in the ATM industry."

"Wells Fargo is a leader in e-receipts," said Malone. "Half of its customers either say they don't want an ATM receipt or ask for it to be sent to their smartphone. Citi was so impressed that we introduced e-receipts a year ago in the U.S. We also intend to offer e-receipts to non-customers using our ATMs."

Malone said Citi is also looking at introducing mobile cardless ATM access — for example for customers who lose their wallets — as well as mobile card blocking and unblocking, and setting up ATM use preferences via smartphone. "ATMs are still the largest delivery channel for Citi, but the growth rate for our ATMs isn't as fast as for our mobile channel," he said.

Willis said Navy Federal Credit Union would also be interested in mobile cardless ATM access. Like Citi, Navy has customers around the globe for whom the service would be useful.

"If customers lose a card, they could use an app to download a one-time-use PIN to their mobile device, which they would use until they receive their new card," said Malone. "The advantage is that customers can do this outside branch opening hours. They don't have to wait for a branch to open to get a temporary replacement card."

NCR is seeing a lot of traction for cardless ATM transaction globally, because of concerns about card skimming, said Critchett. "By the end of 2013, we expect to be marketing our cardless ATM technology in China, Western Europe and the Middle East."

ISOs

Critchett envisioned that for high-traffic ISO-owned ATMs in venues such as sports arenas or concert halls, the ability to pre-stage withdrawals on mobile devices could provide cost-savings.

"Today an ATM is a safe, a dip card reader and a screen, all of which cost money," Critchett said. "But eventually the ATM screen could be on the customer's smartphone. If customers set up a transaction on their smartphone and just used the ATM for cash withdrawal, this could cut the cost of the ATM to the ISO from $4,000–$5,000 to $2,000."

Remote deposit capture

Willis said that mobile remote deposit capture has proved to be a killer app for Navy's members. "Check deposit was an Achilles heel for us," he said. "We only have a small number of branches, but we have members around the world and all over the U.S."

Two years ago, the credit union introduced PC-based online deposit capture followed more recently by mobile RDC. Now 20 percent of Navy's check deposits come through alternative channels, and remote deposits from Navy's customers' mobile devices are set to grow, Willis said. 

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photo: smelly13cat