Smartphones Could Replace Cards at ATMs

John Lister's picture

A British bank is testing ATMs that let customers take out money using their phone rather than a bank card. It says the technology could be safer than using a card because there's less room for hackers to steal details.

Withdrawing money without a card isn't a completely new idea. One rival bank already allows users to get cash out using a smartphone app that generates a unique code that they can then type in to the phone to get money. The idea is to remove the need to carry a card, for example on a night out.

The new system from Barclays would be even quicker to use however, and wouldn't necessarily require app. Instead, the user would simply wave their phone near the ATM, type in their PIN code (on either the phone or the ATM) and select an amount to withdraw.

Android Only For Now

As an alternative method, a user waiting in line at an ATM could enter both the PIN code and the withdrawal amount on the phone, then simply wave it at the ATM to make the cash come out. However, they'd only have 30 seconds to do this before the system would lock out and they'd have to re-enter the amount and PIN. (Source:

The system works through Near Field Communication (NFC), a wireless technology that works over a few centimeters rather than the longer distances of WiFi or Bluetooth. It's the same system used on contactless payment cards. The Barclays system will work on compatible Android handsets but as yet isn't available on iPhones because Apple won't let third-party apps use its NFC technology.

Technology Overcomes Skimming Scams

According to Barclays, the system can be more secure than using cards for a couple of reasons. One is that it avoids distraction theft in which a user is distracted during the time the card is in the machine, making it possible for a thief to take the card, the cash, or both. That's less likely with the phone method because the user never needs to let go of the handset. (Source:

It could also overcome the problem of skimming in which scammers place a device on the ATM that appears to simply be a chunkier-than-usual slot but is actually a tool for reading the information on a card and capturing its PIN, making it possible for the scammers to clone and use the card.

What's Your Opinion?

Would you use your phone to withdraw cash if that was an option? Do you think the benefits are significant? Can you see any obvious drawbacks?

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Average: 4 (4 votes)


Dennis Faas's picture

The major difference between using a smartphone and a bank card for a money transaction at an ATM is that a smartphone is a basically a pocket-sized computer, which makes it susceptible to being hacked. Whether or not this means hackers will be able to intercept and steal information for use in cash transaction is yet to be seen (depending on how the technology works), but there is always a possibility that someone will game the system at some point. On the other hand, a bank card can't be hacked like a smartphone, and therefore doesn't have the same problem. I would like to see more details on how this type of technology works.

dan400man's picture

The only way I'm jumping on this is if financial institutions promise to cover all the losses from fraud that will eventually occur.

mra_6110's picture

I am not a techey, but I think it would be easier from what I read. Correct me. but couldn't you now just place a device at a distance from the ATM and when the code is passed to the phone collect it to be used right away or later?

lgitschlag_3159's picture

It would make things easier but, as always, where's there's a will, there's a way, and then the good guys will have to block that. My South Korean friend said they've been using their phones for years now for purchases, no need for the smart cards the USA is just now introducing. Businesses here resisted the new cards due to cost until the fraud costs became too high. Probably the same thing will happen with the phone/atm idea. And life goes on.

alan.cameron_4852's picture

They should be banned and never allowed to do this. What about the many people who don't have a smartphone. I have a mobile phone and that is what it is a phone, nothing more.

The next thing they will think of is microchipping people to save them having to have their smartphone with them BAHHH.