asked several security questions about replacing a debit card with a smartphone when withdrawing cash from an ATM.
A report on Fin24 on Monday said that more banks across the US are installing ‘cardless’ ATMs that allow bank customers to use smartphones instead of debit cards.
In South Africa, this technology is already available via the likes of First National Bank (FNB). The South African bank, for example, allows customers to use the FNB smartphone app to withdraw cash at some ATMs.
However, the technology is not completely widespread yet and some Fin24 users have raised concerns about this trend.
Fin24 user Michaela wrote:
What happens when your smartphone goes missing or gets stolen or you are hijacked and the criminals go with you to the ATM with your smart phone and conclude a transaction in your presence at gunpoint. What happens if hackers get into your smartphone.
It is not a secure method. The cards at the ATM were also not always secure means as they are cloned or the ATM is tampered with.
Can a smartphone be blocked same way as car locking systems are being tampered with by remotes?
Fin24 user Hantie also has reservations about the technology:
This sounds like a good idea, but one has to wonder if it will work in the South African context. Generally I don’t take my smart phone out of my bag when I’m out in public to avoid being mugged. If I have to use my smart phone at the ATM, thieves will get a bonus: My money and my phone. And if they then have your phone, will they also be able to draw the rest of your money in the bank? If they plan to implement this in South Africa, they will have to post security guards at all the ATMs.
Fin24 user Geoffrey has also raised security concerns:
Criminals are one step ahead of technology and they will continue to survive as this is their only way of bringing income to their households. In South Africa, smartphones increased the rate of crimes and the new banking system will aggravate the situation, criminals will be more aggressive to get what they want. Get rid of the current govt before implementation of these technologies to save citizens from violent crimes.
However, Fin24 user Sibusiso said the concept of cardless ATMs is a progressive one:
Why not, if the communication between the host and the client is secure then why not. The key here is what encryption is being used and how secure is it, I'm all for change.
But Fin24 user Wendy questioned whether cardless ATMs are only designed for those who can afford smartphones:
So, in other words, banking and banking services will only be provided for the rich and affluent. There are thousands of people out there in the world, who cannot afford these fancy smartphones, what about them? I for instance have not got a smartphone. How will I be allowed to withdraw cash if this is allowed? I think it is a bad idea.