Ways to pay continue to evolve and diversify, but cash remains a core means to complete transactions. While financial institutions (FIs) are rapidly shifting to digital and mobile banking to increase interactions with customers, they can benefit by enabling "mobile cash access" for account holders. This method essentially lets a banking customer substitute a smartphone for an ATM, debit, or prepaid card and its associated PIN to withdraw cash at an ATM that has been modified to support transactions "pre-staged" via the mobile device.
Financial institutions that view expansion of the ATM channel as an opportunity to further enrich their level of interaction with consumers will be well positioned to deliver value-added individualized customer experiences, primarily in the form of enhanced security and personal financial management, according to the latest research, Mobile Cash Access 2017: Engaging Customers by Linking Digital Banking to Cash.
This research report examines the various approaches to enabling mobile cash access, consumers’ mindset and expectations about such transactions, and how the functionality goes beyond eliminating the card to deliver additional interactive opportunity and assurance.
"Day-to-day transactional banking activity is consolidating in the individual’s mobile device, providing greater flexibility to the consumer and cost savings to the financial institution via intuitive self-service," commented Joseph Walent, Associate Director, Customer Interaction Advisory Service, the author of the report. "Mobile cash access is the natural progression of this directional expansion and will deliver additional touchpoints for financial institutions and consumers to engage and share information. The ability to set up cash withdrawal in advance of visiting an ATM will be just one way consumers will realize expanded engagement with financial institutions they use, conveying their intent rather than just recording the outcome."
Highlights of the research report include:
- The marked differences and shared attributes of the two primary technologies in play enabling mobile cash access in the U.S.-NFC and QR Code
- Expanded depth of identity authentication available to combat fraud
- Proprietary survey data indicating which consumer segments are most likely to move quickly to embrace mobile cash access, and which are most likely hold onto their cards
- The expected pace of adoption
- Some of the potential opportunities mobile cash access introduces.
1. Executive Summary
3. The Hardware-Based Solution: NFC
- Benefits Justifying the Cost of Deployment
- Battery Charge a Limiting Factor
4. The Software-Based Solution: QR Codes
5. Security Enhancement
- Biometrics Strengthens Security Further
- Other Benefits for Financial Institutions: "Headless ATMs"
7. Account Holders’ Readiness
8. Managing Customers’ Expectations
9. Potential Benefits for Personal Financial Management (PFM)
10. Physical Security and Fraud Prevention
- Mobile Cash Access Reduces Skimming
- Integrated Biometrics
List of Figures
Figure 1: Mobile Cash Access Appears to Have a Receptive Audience in the U.S.
Figure 2: Mobile Cash Access Can Support Account Holders' Predictable Cash Withdrawals
Figure 3: Smartphone in Lieu of Card and PIN via NFC
Figure 4: Smartphone in Lieu of Card and PIN via QR Code
Figure 5: Are ATMs Anchoring Cash Access?
Figure 6: Key Mobile User Segments Make Frequent Use of ATMs
Figure 7: Use of PFM Services by U.S. Consumers Is Expanding
Figure 8: Driving to Financial Goals Is a Core Motivation for Household Budgeting
Figure 9: Projected Expansion of Mobile Cash Access ATMs: NFC vs. QR Code Enabled, 2015-2F