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What to Expect if Your Bank Switches to Cardless ATMs

You can do just about anything with a smartphone these days and if big banks have anything to say about it, that will soon include getting cash at the ATM. While some smaller banks have already rolled out cardless ATMs, Bank of America, Chase and Wells Fargo are among the biggest financial institutions to jump on this trend. The updated machines are expected to roll out sometime in 2016 but in the meantime, here’s what you need to know to prepare for the change.

Find out now: Which checking account is best for me?

How Cardless ATMs Work

The premise behind cardless ATMs is fairly simple. You log into a banking app on your smartphone and scan a QR code on an ATM to make your deposit or withdrawal. The codes are designed to be used once and they expire so no one can attempt to duplicate a transaction.

Some cardless ATMs could rely on near-field communication, which is what mobile payment methods like Apple Pay use. In that scenario, you’d still log in through the mobile app but instead of getting a QR code, you’d tap the ATM screen with your phone. Either way, you wouldn’t have to physically use your card at the ATM and both methods offer a secure way to conduct transactions.

Related Article: All About Mobile Banking

What Are the Benefits?

What to Expect if Your Bank Switches to Cardless ATMs

Cardless ATMs have the potential to benefit bank customers in a few different ways, so they’re something you might want to consider when comparing accounts at different banks. For one thing, it’s more convenient to use your phone to grab some cash than it is to carry around a wallet full of plastic. And going cardless can save you valuable time at the ATM.

Increased security is another advantage of the new machines. Skimming is common among fraudsters and identity thieves who use the technique to gain access to banking information. An identity thief can easily extract the information encoded in your ATM card’s magnetic stripe and get instant access to your financial details. By not requiring cards, the updated ATMs eliminate the skimming threat.

With cardless ATMs, you’ve also got another layer of protection if someone steals your phone. Assuming you’ve put a lock code on your device, a thief would need to figure out the passwords to your phone and your mobile banking app in order to access your account. Basically, cardless ATMs can make your life easier and make things more challenging for identity thieves.

Related Article: 4 Ways You’re Making Yourself Vulnerable to Identity Theft

How Cardless ATMs Affect Withdrawals

What to Expect if Your Bank Switches to Cardless ATMs

As part of the effort to get customers excited about cardless ATMs, some of the big banks are changing their withdrawal policies. For example, Chase is raising the maximum withdrawal limit to $3,000 and the new machines will now dispense money in $1, $5, $20 and $100 denominations.

Banks charge a number of fees and one thing that’s not likely to change is the fee for using an out-of-network ATM. If you need to use your card at another bank’s ATM, be prepared to pay an extra fee for the convenience.

Photo credit: ©iStock.com/Manuel Faba Ortega, ©iStock.com/Eva Katalin Kondoros, ©iStock.com/VisionPhotoConcepts

Rebecca Lake Rebecca Lake has been writing about the nuts and bolts of personal finance for nearly a decade. She is an expert in investing, retirement and home buying topics. Her work has been featured on The Huffington Post, Business Insider, CBS News, U.S. News & World Report and Investopedia. As a homeschooling mom of two, she's always looking for ways to make the most of every dollar.
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