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ATM cardless cash access: Why the QR code matters (a lot) to FIs

A cool customer convenience, yes. But that's just the beginning of the story for the financial services industry.

November 4, 2013

"This is not just vaporware."

Of all the chatter about cardless cash access — and there's been a lot — a comment by Douglas Brown, SVP and GM of FIS mobile, stands out. Because, what started out seeming vaguely like a party trick is now looking more and more like a pending, and very important, reality for FIs.

On day two of the recent ATM, Debit & Prepaid Forum in Las Vegas, banking and payment technology provider FIS and Wintrust Financial Corp., a holding company with 15 subsidiary banks in Chicago and Milwaukee markets presented "The Intersection of Mobile and ATMs: Cardless Cash Access."

In the case study-style session, Brown quizzed Tom Ormseth, an SVP heading up customer-facing products at Wintrust, about the FI's experience with its mobile cash access pilot earlier this year using the mobile solution from FIS.

In fact, having concluded a successful pilot, Wintrust now plans to roll out mobile cash access at 180 Diebold Opteva ATMs by the end of the year. That definitely doesn't seem like vaporware.

Ormseth began by explaining that, as a collection of community banks, Wintrust does not have the wherewithal of larger FIs to try out several different products before selecting one.

"So whichever one works, we're fine with," said Ormseth. "We'd been talking to FIS and Doug for a while about what we can do to get into the mobile wallet space. We think the mobile wallet's coming and this seemed to be a good way to get into it, to build the infrastructure for it."

Ormseth said that the plan was to get consumers up and running with the technology, demonstrating that the FI could compete with bigger players in the Chicago area.

Wintrust had a larger objective in piloting a cardless ATM feature. Ormseth said the FI wanted to determine whether consumer uptake of a mobile wallet app with cardless cash access would ultimately translate into merchant uptake of QR-based mobile payments.

"We could go out to our small merchants and we say, 'Look, our customers are using this and maybe you should think about doing a wallet,'" Ormseth said. "That's sort of the end game, is to help both our merchants as well as our consumers inside this."

Getting consumers "inside" the app was not the simplest of propositions Ormseth said. The typical customer reaction to mobile cash access was, "So what? I can do the same thing at an ATM."

"The challenge for us was getting people past that, because without fail, the people who have been using this have said, 'Eh.' And then when they get done with it, they're like, 'This is really cool,' often using an expletive with it," Ormseth said.

Wintrust has used marketing strategies that include video and employee training in order to overcome initial customer skepticism.

Brown said that offering cardless cash access is the first step for FIs in introducing customers to wallets and payments. And for an FI, getting consumers into its mobile wallet was critical, as third-party wallets options from Google and Isis gain momentum.

This is something banks should worry about, Brown said. With their card in another provider's wallet, the FI loses not only its brand connection to the consumer, but also its access to and secure maintenance of the customers data.

"Then, a massive disintermediation has occurred that we don't think is good and in [FIs'] collective best interests," Brown said.