Cardless ATM transactions and the 'full monty' mobile wallet experience
by Dan McKinney, Co-founder and CMO, Finxact
For nearly three decades, I have invested in, operated and launched a number of innovative products and services in the technology industry. During that time, I've come to love every aspect of technology, particularly technology products and services that eliminate the friction for consumers such as mobile payment apps.
That's why as a consumer and a fintech enthusiast, I recently began conducting a personal experiment of sorts. I ditched my wallet — including cash and my debit card — to start using my iPhone as my only method of payment. However, truthfully, I have not gone the "full monty." I still carry my license and one credit card for emergencies.
Recently, I learned that my local Wells Fargo branch had launched their first cardless ATM. The ATM now enables consumers to use a one-time PIN found on the Wells Fargo mobile app to make a withdraw or deposit. As someone who does not carry a wallet or debit card, I was excited to have the opportunity to test the bank's newest feature as well as determine how easy it was for consumers to access their accounts. While the one-time-PIN process was not 100 percent frictionless, my first cardless ATM withdraw was a huge step forward in supporting my wallet-less experiment.
After this initial experience, it occurred to me that the Wells Fargo ATM was capable of NFC, and therefore had the potential of authenticating me through my Apple Pay wallet. So I returned the next day and my second cardless ATM withdraw turned out to be one of the most seamless experiences in banking. My wallet-less experiment is now frictionless at Wells Fargo ATMs, and it no longer requires the somewhat confusing one-time PIN process.
According to recently published research from The Financial Brand, the biggest trend in 2017 among financial firms is "removing friction" while the second largest marketing spend is on "mobile banking solutions." Wells Fargo has accomplished both with a trifecta of embracing Apple's nearly universal iPhone and Apple Pay.
This new research shows that despite having heard that "the mobile wallet" has been on its way to consumers for years, it has actually arrived! Apple Pay was introduced three years ago and now we're finally starting to see banks embrace mobile wallets not only for merchant transactions, but also for transactions at ATMs and even between consumers using the banking system's own Zelle P2P offering.
With use of mobile wallets on the rise, we're also seeing increased use of biometrics (fingerprint, facial and retinal recognition). This method of authentication is infinitely more secure than the standard four-digit PIN we all have. And we now have companies like Apple using secure, tokenized credit and debit card credentials at the point of sale.
Although my personal experience may not seem earth-shattering, it demonstrates that we are finally beginning to see movement in the financial services industry towards truly mobile-only use cases. The adoption of this technology is eliminating the friction at the ATM for consumers and validating the notion that "the mobile wallet" has ever-expanding value and utility in today's world.
The beginning stages of this technological transformation will likely go unnoticed by most. However, as more merchants and banks begin to incorporate mobile payments, and consumers realize how much more secure they are, the adoption and development of applications surrounding "mobile-only" will accelerate. I am confident that in our lifetime we will see most consumers carrying only their phone in lieu of a wallet, and then we can all go the "full monty."