For readers who might be worried about "skimming" devices on automated teller machines after seeing my story yesterday on the increase in such scams in Charlotte, there is ATM technology available that could fight back.
"It's in the early stages," said Ed O’Brien, a banking analyst for Maynard, Mass.-based Mercator Advisory Group.
Financial institutions are paying close attention to what other firms are doing before deploying the technology, O'Brien said.
"Everyone's watching everyone else," he said. "I think in the next probably year to two we'll see a lot more increased availability."
Cardless ATMs allow customers to conduct transactions without having to insert their cards into the machines. In theory, the absence of a card should reduce skimming, which involves criminals placing devices on ATMs to steal account data when consumers slip their debit or credit cards into the card reader.
One form of the technology works with smartphones. The phones scan a "quick response," or QR, code on an ATM, enabling a transaction to occur.
O’Brien said he's heard of roughly a dozen financial institutions who are either making that technology available, or expected to soon, in the U.S. He said one of those is ATM maker Diebold, which last year announced that Diebold Federal Credit Union would pilot the world's first ATM without a card reader or PIN pad.
O’Brien said he's heard of a couple of dozen other firms that are testing QR code technology, with plans to possibly offer it to customers by the end of this year.
Of course, not all ATMs are owned by banks. Some are owned by independent operators. O'Brien said it seems that only banks and credit unions are currently interested in putting the QR code technology in their ATMs, since the technology is tied into mobile-banking.
Bank of America and Wells Fargo are likely among the banks testing it, but "they've been very close to the vest" with their plans, he said.
Wells Fargo spokesman Josh Dunn said the San Francisco-based lender is "constantly evaluating ways to improve our customer’s ATM experience," but the bank has no comment regarding cardless technology at this point.
Bank of America spokeswoman Tara Burke said the Charlotte-based bank is watching changing consumer behavior "and will adapt to it." Bank of America is always looking at new technologies to make banking easier for its customers, she said.
Another type of ATM technology, which relies on biometric data such as fingerprints, is not yet being widely deployed as testing continues, O'Brien said. An ATM equipped with that technology could scan a customer's fingerprint to verify their identity.
O'Brien said he's not sure when consumers will start seeing broad use of biometric technology on ATMs.
"I know that the capabilities are available on some new-generation ATMs," he said. "The manufacturers are demoing those capabilities."
Skimming, which is also known to occur at gas pumps, is the most common type of cybercrime in the Charlotte region and is on the rise in the region, according to the U.S. Secret Service. That comes at a time when banks are reporting rising use of ATMs as they outfit them with more capabilities.