One of the greatest challenges from time immemorial has been to find a way to securely conduct financial transactions. Long before there was paper money, individuals would have to transport valuable goods long distances, which made them subject to hijacking. Currencies became small, easily concealed items of value like spices and salt. Then coin-based currencies were developed, which were soon followed by banks. Customers could put their money in one bank, then travel a great distance and withdraw the same amount at a different bank. As much as banks may seem like a modern invention, banks actually date back to Roman times when most of the world conducted business using the same currency.
Back then, however, the currency itself had value as coins were made of gold, bronze, silver and other valuable metals. The more valuable the metal, the more valuable the coin. Then came paper currencies, which had no value in and of themselves, but were instead backed by securities such as gold or oil. The drawback of paper currencies, however, was that if you lost your currency or had it stolen, you were simply out your money.
That led to the rise in credit and debit cards. The card could be used to initiate all the same financial transactions as cash, but if you lost the card or had it stolen, you still possessed all the cash they allowed you to access. The drawback, of course, is that if criminals simply obtained the credit or debit card information, they could initiate purchases against your accounts. Banks and card issuers maintained public trust by absorbing the costs of these fraudulent purchases, but ultimately, these costs always find a way to land right back in the laps of consumers.
The Problem With Physical Credit and Debit Cards
Thanks to the internet, criminals now have the ability to collect information contained on millions of credit cards in one fell swoop. In many cases, this doesn't even mean just the credit or debit card number itself, but the CVV numbers from the backs of the cards and in some cases even personal information about the card owner such as addresses and phone numbers.
The lax security of credit and debit cards led to the rise in EMV cards. EMV cards interact with terminals via a digital chip that creates a one-time-use code with which to conduct transactions. Instead of handing over entire credit card numbers and other information for a merchant to store (sometimes securely and sometimes less securely) stolen EMV information is essentially useless because it contains information that can only be used for that single transaction.
The problem with even EMV cards, however, is that consumers themselves still needed static information to use for online purchases, which could still be stolen and used fraudulently. The card itself could also still be stolen and used even at an EMV terminal.
The Rise of Digital Wallets
The failure of EMV cards to fully secure transactions led to the development of digital wallets like Apple Pay and Google Pay. Digital wallets are now one of the most secure ways to pay. They combine the security of the one-time-use codes generated by EMV chips with the heightened security of biometric scanning while at the same time containing none of the static information carried on credit and debit cards.
The only drawback of digital wallets, however, is that there are still a number of places and ways in which they cannot be used. One of these places is at an ATM. ATMs still require the insertion of a physical card (which the customer has to carry around with them) and a simple PIN. That simple PIN is often all that may stand in the way of a thief draining a person's entire bank account and there are plenty of ways to get that PIN. Even without a PIN, the debit card information itself can still be used to make purchases or initiate transactions online, which has the same effect.
Cardless ATM - Security and Convenience
Cardless ATMs will soon be one of the most secure and convenient ways for customers to access their accounts. Instead of having to carry around a debit card, which can easily be lost, stolen or simply have the information contained on the card stolen, they can now initiate transactions from their phone or mobile device. Since most mobile devices are secured with some type of biometric authentication, this adds an additional layer of security to ATM transactions. If devices are lost or stolen, not only are they protected by biometrics, but they can actually be remotely wiped clean of all personal information. The ability to access cardless ATM's will allow customers to leave their debit cards at home, which significantly decreases the risk of having the information stolen or used fraudulently.
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