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Friday, March 4, 2016

Smartphones, smartcards for future ATMs

MasterCard Worldwide and Visa Inc.'s Europay, MasterCard Visa (EMV) liability shift deadlines and mobile technologies that replace credit and debit cards are impacting the ATM landscape, according to some payments analysts. MasterCard will shift liability for fraudulent transactions to ATM owners Oct. 1, 2016. Visa's deadline will become effective Oct. 1, 2017.

Additionally, a growing number of mobile solutions eliminate the need for credit and debit cards at ATMs. One example is the cardless cash network, Pin4, established in October 2015 by HalCash North America Inc. Pin4 disclosed Feb. 23, 2016, it had reached an agreement with Payment Alliance International for a phased U.S. rollout of a multifaceted mobile cash solution.

The companies expect Pin4 to provide new sources of revenue to ATM owners and a range of mobile solutions to U.S. consumers. The Pin4 network will be deployed in April 2016 at ATMs in New York City, Miami, Chicago and Los Angeles. The rollout is scheduled to be completed by the fourth quarter of 2016.

"We are thrilled to have launched the initial phase of our rollout," said Richard Witkowski, Chief Executive Officer of Pin4. "Cash isn't going anywhere, and as companies and consumers increasingly look for mobile solutions that reach beyond simple cash withdrawals, our technology is the very first to equip ATMs to facilitate P2P transfers as well as rewards and promotion redemptions. With Pin4, ATMs become mobile money terminals."

Witkowski further noted that enabling ATMs in America's four largest cities will help scale the project by providing a large concentration of ATMs equipped to offer cardless cash withdrawals. Participating stakeholders will be uniquely positioned to bring new and innovative solutions that have the potential to redefine the ATM marketplace, he said.

Dual PIN authentication

Mobile, cardless cash withdrawals will offer consumers expedient and simplified access to cash without the need for a bank account, debit or credit card. Pin4 additionally provides end users with a high level of security through the company's patented method of dual-pin authentication, the companies noted.

To withdraw cash, Pin4 users send a text message to recipients' phones by entering a secure personal identification number (PIN), which they enter along with a code the sender has provided. Recipients will then be able to pick up their cash within minutes at Pin4-enabled ATMs, using the Pin4 mobile app to locate the nearest enabled ATM.

One technology, multiple uses

Payment Alliance International, a leading independent ATM deployer, will help Pin4 network expand its U.S. footprint. In addition to making cardless cash withdrawals available at participating ATMs throughout the United States, the company plans to offer numerous value-added services to merchants and consumers, including the following products and services:

  • Global money remittance
  • Peer-to-peer (P2P) payments
  • Mobile wallet cash withdrawal
  • Brand promotion
  • Emergency cash promotions
  • Loyalty and incentive programs
  • Rebate programs
  • E-gifts
  • Disaster cash disbursement
  • Lottery game payouts
  • Micro lending
  • Insurance claim payments

PAI's growing cardless portfolio

"In our view, Pin4 takes the ATM to a new level of cardless cash withdrawals through P2P transfers and the ability for consumers to receive various promotions via a self-service model, whenever and wherever they want," said John J. Leehy III, President and CEO of Payment Alliance International. "We're thrilled to partner with HalCash to launch the Pin4 solution at enabled ATMs in select cities and look forward to a full rollout to the entire PAI ATM network in 2016."

The Pin4 partnership is the most recent addition to PAI's expanding portfolio of cardless cash solutions. The Louisville, Ky.-based company partnered with Fiserv Inc., a financial services company headquartered in Brookfield, Wisc., to develop CardFree Cash, a revised version of Fiserv's Popmoney mobile cash platform. The partners launched Popmoney in September 2015. Popmoney sends a one-time verification code to a requestor's mobile phone or email address to validate the user and prevent unauthorized use. The user subsequently presents the email or text message verification code to obtain funds at an ATM or other service provider. As an additional security measure, users who present Popmoney tokens at the ATM will be required to provide real-time authentication by using biometric-enabled iOS or Android devices, PAI noted.

Participating ATMs will be outfitted with beacons that can identify nearby registered Popmoney users and send out proximity notifications, alerting them to the ATM's location and availability. Donna L. Embry, Chief Payments Advisor at PAI, noted that Popmoney, Pin4 and cardless cash networks in general are designed to leverage existing ATM real estate and online banking infrastructure. Embry suggested these mobile solutions, when broadly deployed, could potentially transform ATMs from passive terminals to next-generation, interactive devices.

Why chip, why now?

Merchants and ATM owners, tasked with upgrading existing ATM infrastructure to comply with MasterCard and Visa EMV liability shift requirements, have questioned whether it makes sense to install chip card readers at a time when many of their customers would prefer to use Near Field Communication (NFC) technology at ATMs.

"I don't understand why we're adopting a 20 year old technology and investing in new chip-enabled debit and credit cards when the consumer wants to transact on their smartphones," said George Sarantopoulos, founder and CEO of Access One ATM. "The banks and card brands behind this initiative are simply taking the fraud off of their balance sheets and pushing it down to merchants and ATM owners."

Paula Hunter, Executive Director of the NFC Forum, has observed a marked increase in NFC adoption in major regions of the world, across multiple industries and use cases. The Forum works with leading technology companies to provide a flexible, stable framework for application development and security for NFC-enabled transactions. It has released 16 specifications since the organization was established in 2006, designed to provide a road map for the design of secure, interoperable consumer-driven products.

"It's about leveraging the surrounding infrastructure to create consumer incentives and loyalty," Hunter said. "As consumers gain confidence in the technology, they will use their phones again and again." end of article

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