atm skimming cardless transactions

According to Gizmodo, there were 5,631 cases of ATM skimming recorded across the world in 2014. The total losses due to ATM fraud were USD 300 MM in 2014. Of this, USD 255 million were due to ATM skimming.

This is not something to be taken lightly and there have been a slew of measures to curb this menace such as geo-blocking and anti-skimming devices.

But what if there was a way to make it impossible for fraudsters to get card details? What if we removed the card altogether from the equation? This is possible by using cardless transactions and trusted devices that account holders carry with them all the time – their smartphones.

How cardless ATM transactions work?

According to Chicago-based Wintrust Financial, a cardless transaction takes only 8 seconds compared to card transaction that takes an average of 47 seconds. This is how the process works:

  • When you are at the ATM, open your bank’s app on your smartphone (most require you to enter a four-digit code)
  • Open the QR Code scanner feature in the app
  • Scan the QR Code that the ATM will display on its screen (the QR Code changes for every transaction just like how the WhatsApp Web QR Code works)
  • Your identity has been verified and you can go ahead and withdraw the money

So instead of using a magnetic-tape card and a PIN, you simply use your smartphone app to authenticate yourself.

How to set it up?

To set up cardless transactions, you will need the following:

1. A QR Code Generator API

You will need to update your ATM software to generate a QR Code whenever the option of cardless transactions is chosen by the account-holder. This API will generate a custom-encrypted QR Code which can only be decoded using the scanner feature of the bank’s app.

2. QR Code Scanning Feature in App

You will need to update your mobile banking app to include the scanning feature. This scanner will detect and decode you custom QR Code to authenticate the transaction.

The best part about this implementation is that no additional hardware is required. Only software patches. This is one of the most cost-effective ways of eliminating threat of ATM skimming and decreasing transaction time.

In Jan 2015, Wintrust Financial launched about 200 cardless cash ATMs in the US.


Gautam Garg is a Co-founder of Scanova. He is a QR Code enthusiast and a big fan of inbound marketing, CRO, and usability. When taking a break, he likes to travel solo and eat spicy food. Follow him on Twitter @GGarg88