Headless ATMs Employ Proximity Technology to Reduce Fraud and Crime

The ATM card is a convenience that many bank customers take for granted. A swipe of the card at ubiquitous ATM machines offers fast, convenient access to cash. But ATM cards are old technology that bring unnecessary security risks. Skimmers can capture card and PIN numbers. Cards can also be easily misplaced or stolen. Swiping an ATM card is old school but it’s also high risk. New technology is paving the way for so-called headless ATMs whose features can reduce fraud and crime. By not relying on a physical card, new mobile technologies can make ATM transactions safer and more secure.

BMO Harris Ban, a unit of Canada’s Bank of Montreal, introduced a cardless ATM network intended to both reduce fraud and reduce the time needed to complete transactions, according to Bank customers prepare their transaction before arriving at an ATM. A banking app allows customers to pre-select how much money they wish to withdraw. Once they reach the machine, they simply hit the mobile cash button. The ATM reads a QR code on the smartphone, allowing the machine to dispense the cash and complete the transaction. The entire process leaves no way for a bank customer’s card to be lost or skimmed, Tom Ormseth, head of digital channels for Wintrust Financial Corp., tells However this method is cumbersome and requires additional changes to the ATM for scanning smartphones.

These new ATMs could help banks and their customers stay a step ahead of criminals. In 2014, bank customers lost $1.7 billion to debit, prepaid, and ATM fraud, says, citing Federal Reserve figures. While new credit card technology employing EMV chips has made counterfeiting cards more difficult, most ATMs still do not use the new technology. “[Criminals] know there is still vulnerability [at the ATM] and they are trying to capitalize on it,” Owen Wild, director of security marketing at ATM maker NCR Corp. told the Wall Street Journal.

New technology offered by Netclearance can help ATM makers and banks make the transition to headless ATMs. The company’s mBeaconPay platform supports proximity applications conducted on smartphones and tablets. The technology handles transactions smoothly and securely plus it integrates seamlessly with the existing ATM controller. To learn more about how mBeaconPay can address your banking transactions needs, contact us.