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US Banks To Test ATMs Which Accept Your Smartphone Instead Of Cards (ibtimes.co.uk)
Dozens of banks in the US are updating their ATMs, or installing new ones, in order to allow customers to withdraw cash without using bank cards. A new cardless system will be rolled out at around 2,000 cash machines across the US, operated by at least 28 banks, including giants like Wells Fargo, Bank of America and Chase. Under the new system, people can order cash on an app on their phone, and then scan a code at the ATM to receive their money, all without inserting a card or entering a PIN. The developers of the system insist that smartphone technology makes for faster and more secure transactions. More banks are expected to adopt the technology soon.
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A version of this is already widely in use in Australia. Log into bank via smartphone, request amount of cash, receive code. Go to that bank's ATM, request cardless cash, enter code, ???, cash! I no longer carry a wallet, just my smartphone with 3-card slimline case containing my ID/drivers licence, public transport RFID card, and credit card. I'm able to slip a $20 in there too for the few remaining places who either don't take credit or charge a fee to do so.
I'm betting it's that the banks see some sort of additional revenue stream from doing this. Maybe they think they'll get higher overdraft fees by making withdraws easier to screw up? Without the phone maybe liability lies with customer not bank, since without a PIN the customer has less of a case to claim it wasn't them who made the withdrawal?
As a former Bank of America customer and employee, trust me they do not need any smart phone app or extra functionality to get higher overdraft fees. Let me tell you what Bank of America does to some people.. They regularly withdraw a percent of your account, play it in the stock market and make money on it and then put it back.. and if you are unlucky enough to try to withdraw from your account while they are doing this, you get an overdraft fee.. and they will add up before it shows up in the ledger that they host on your account on their website (IE the numbers they show there are not accurate and when you confront them on it, they say as much.) No matter how much you confront them on it, you can end up in a situation where they will charge overdraft and add them up until you get overdraft fees being charged from overdraft fees being charged and they will not own up to it no matter how dead to rights you have them on it. They figure they can victimize lower income customers, because it is not like they are going to be able to afford a lawyer to sue them.
I even tried to call the local news media and get them to do a story on it and apparently Bank of America has the news stations paid off too, as apparently they do this to a lot of people.
I eventually went into a location with my bank card and a pair of scissors, cut up my card on their desk and left a binding document that they owe me $900.00 that they heisted out of my account and that I have no intent to pay the fraudulent overdraft fees remaining on my account. They have made no attempt to collect on the remaining fees because they know they are in the wrong (and probably know I called the news media.) Bank of America are a bunch of crooks, do not waste your time or money doing business with them!
This sounds like you fundamentally didn't understand how the "money market" account you had worked.
I'm not going to defend BoA here, but many people simply don't understand the difference between a savings account, checking account, and other "higher interest" accounts. Paypal is another example of a "money market" account. Never use a money-market account as anything other than a store of value, because you can, and likely will lose money if you repeatedly put money in it and take it out before any calculations can be performed on it.
The poster above describes a Money Market account that they were using as a checking account. It's also likely that BoA didn't go after the poster for the overdraft charges because it's easier to write off customer dissatisfaction claims than it is to sell it to a collections agency.
As for the topic, everyone knows that scanning a barcode is a bad idea to transfer money. All one needs to do is swipe the smartphone while it's unlocked, and clean someone out. This is another example of where the biometric and the pin need to be combined to work. A similar issue can be created by having the banking app on the phone hijacked (hello Android phones) and the thief needs merely show the barcode at the ATM to get the money without any confirmation.
As it is, the correct solution really is to cut out middleman, just use credit/debit over NFC or with the EMV chip everywhere you can, and avoid touching gross physical cash.
The phones are cheap, plans are prepaid (and cheap), it's safer than carrying cash, and the mobile networks are ubiquitous. While the US has only recently been getting on board with transferring money by phones, much of Africa has been doing it for years.
Example: A Samsung Note 2 (not the latest and greatest, but still a decent phone) from Jumia Kenya is 550 Kenyan shillings. According to xe.com, that's about US$5.39, based on an exchange rate of about 102 Ksh to the US dollar.
Being poor doesn't mean being disconnected. Poverty hasn't been a barrier to mobile phone use in other parts of the world for many years. Even in Afghanistan, cell phone towers are common even in the remote regions, because they get used.
You can never go home again... but I guess you can shop there.
And those same poor people have money for a smart phone how exactly?
By working and getting paid for it. In much of Africa, you can buy a phone capable of financial transactions for less than $20 new, and less than $5 used. It is considered important enough that most households will buy a cellphone before they buy a TV or refrigerator.
It's the same as a credit card
You cannot use a credit card for peer-to-peer transactions, and a CC is much harder for a poor person to get than a cellphone.
while having dependency on some type of connectivity for the Cell.
You must be an American. In much of the rest of the world, cell coverage is ubiquitous.