Bank of America, Wells Fargo and JPMorgan Chase have announced plans to roll out ATMs that take smartphones as well as ATM cards to authenticate transactions in an effort to reduce the likelihood of skimming and other security attacks as well as make ATM use more convenient for users.
The new ATMs will support near-field communication (NFC), tap-to-pay technology similar to what is used in Apple Pay and Android Pay, or codes provided through a customer's banking app, according to the Los Angeles Times.
Later this year, Chase's ATMs will first implement a code-based authentication system that uses a temporary PIN. The company is currently working on ATMs with NFC capabilities but it is unclear when they will be made available, the Times said.
to make a deposit at Chase through a mobile app; 8¢ at an ATM; and 65¢ with a teller.
A Bank of America spokesperson told SC that the firm was to begin rolling out its NFC-enabled ATMs in select cities in late February followed by a broader launch mid-year.
Wells Fargo reportedly will adopt NFC technology by the end of the year.
Some security researchers think smartphones are more secure than ATM cards and can helps banks save money in the long run.
VASCO spokesperson John Gunn told SC that the additional methods of authentication available with a smartphone, such as biometric authentication, could help make smartphones a safer alternative.
“Using smartphones for ATM transactions enhances both the security and convenience of the ATM transaction,” said Gunn, who explained that ATM cards are vulnerable to skimming attacks, which have cost banks more than $1 billion.
Should a thief get hold of a victims' smartphone, they would need to unlock the phone, login to the mobile bank app or mobile wallet and have knowledge of the customer's PIN.
Some researchers however, feel smartphones aren't inherently safer than ATM cards. “To hack a smartphone, one can be anywhere in the world, which exponentially increases the number of potential attackers and available skillset,” Igor Baikalov, chief scientist at Securonix, told SC.
But Baikalov said that smartphone security can be boosted enough to keep the cost of breaking phones “prohibitively high” for the majority of hackers, but this might come at the cost of convenience for the user.