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Cardless Banking

Greg Medcraft
16th March, 2015

Technology is changing at a rapid pace. Some banks now let you withdraw money at an ATM without a card. You may also be able to pay for goods and services with your phone.

This new technology can be easy and convenient but it pays to know how it works before enjoying the potential freedom this technology gives.

Getting cash from an ATM without a card

To withdraw money this way you usually need to log in to your banking app on your smartphone and select the option to receive a cash code. You will receive a unique code by text message, and may also receive a Personal Identification Number (PIN) by separate text message if required by your bank. Then, you simply find an appropriate ATM and use the code(s) to collect your cash.

You only have a short period of time to get to an ATM before the code expires. The code will also expire as soon as you withdraw your money.

Protect your temporary codes with the same diligence you would use for your standard PIN.

If you don’t have a banking app you may be able to use this system by calling your bank and identifying yourself. You can also use it to give cash to someone else such as a family member or close friend, by giving them the code(s).

Tap your phone to pay

This method of payment uses similar technology to that used in contactless cards, allowing you to tap your phone instead of your card. It works for smartphones that have a computer chip, called a Near Fields Communication (NFC) chip, embedded in them, allowing them to work in the same way contactless cards do.

If you don’t have a phone with an NFC chip, your bank may be able to provide you with a tag to stick on your phone that performs the same function. They may charge you a small fee for the tag.

Pay to a mobile phone number

Some banks let you pay someone using only their mobile phone number. When you send a payment to someone they receive a text message that includes a code and instructions on how to retrieve the money.

The recipient needs to follow the instructions, enter their account details and the funds will then be deposited into their bank account.

It is also possible to send payment to an email address or Facebook contact in the same way. When making payments this way always check the recipient’s details carefully and ask your bank if you’re unsure how to make a transaction.

Before you embrace this new technology, make sure you understand how it works and how to keep your money safe. Ask your bank to explain anything that

is not clear. Visit ASIC’s MoneySmart at moneysmart.gov.au for more information about different ways to pay for things, including information that will help you choose the best payment option for you.

Greg Medcraft
Chairman
Australian Securities and Investments Commission

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