In an attempt to beat ATM card fraud, Canadian bank BMO Harris is now installing cardless ATMs. The problem with magnetic strip cards is that it's all too easy to insert readers that can collect data from said cards on ATM machines so BMO Harris is instead having customers use their phones to authenticate their withdrawals.
Making it harder for card thieves
Card cloning is a global phenomenon and BMO Harris' move is certainly innovative. What happens is you install an app on your phone, choose a password and then set how much money you want to withdraw on the app itself.
Hold your smartphone over the ATM's QR code and the cash is dispensed. The bank claims that the transaction will take only 15 seconds as compared to a typical ATM withdrawal that would reach 45 seconds.
No card information will be stored on the phone so hackers getting at the phone won't be able to clone the card information from smartphones. Consumers can also choose whether to maintain a card or go totally cardless.
If implemented worldwide, this could be a great way to make withdrawals safer without adding complexity. And seeing how cheap smartphones are these days, there won't be a high barrier to entry for the average consumer.