"Cardless cash" eliminates ATM cards and PIN codes

Cash access without an ATM card could be just a smartphone app away. Several banks are offering customers the capability of withdrawing money from a branch ATM without using a card or PIN code.

With more people using mobile banking apps, adding an option to withdraw money can give customers more privacy and convenience. The new systems were also designed to help avoid theft from skimming machines attached to card readers, which steal passwords and data.

"I like the app," Bart Johnson, a customer of Wintrust Bank in Chicago, told CBS News. "If I don't have my wallet or debit card on me, but I do have my phone, which I always have, I go right to the ATM, put it up to the ATM and get my money."

The option is called "cardless cash." Using the bank's smartphone app, customers can set up a withdrawal in advance through their phones. The app provides a QR code for the transaction, which customer can then scan at the ATM to receive their requested cash. No card or passwords are entered into the machines.

But there are other security concerns with using smartphones instead of ATM cards -- mainly the risk of storing bank information and passwords in the cloud.

"What if you lose that phone? If somebody wants in the phone bad enough, it just takes time." Louis McHugh, a computer systems manager at the Illinois Institute of Technology, told CBS News. "As we've seen with some of the recent security breaches, how secure is the cloud, really?"

But banks contend they've put in place adequate protection from hackers.

Wintrust Bank said stealing the account information and passwords from the cloud wouldn't be enough for hackers to get money from an account because the transaction is linked to a specific, registered mobile phone.

In:
• Smartphone

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