Cardless Cash Access replaces bank cards with smartphones

City National Bank in the US is about to offer a new way to withdraw cash from ATMs: using a smartphone app instead of a bank card.

In a bid to reduce card skimming and fraud, global banking technology company FIS is partnering with the US' City National Bank to launch something it's calling Cardless Cash Access: an app that allows you to withdraw cash from an ATM using your smartphone instead of a banking card.

Here's how it works: customers have to register their phone and then access the app using a PIN, which allows them to select how much they want to withdraw and find a nearby ATM to withdraw from, up to 24 hours before they intend to collect. When they arrive at the ATM, they select the "Mobile Cash Access" option and scan the one-time QR code that appears on the screen. This immediately dispenses the cash, and a withdrawal notification is sent to their phone.

But what if the customer, as happens fairly often, loses or has their phone stolen? According to FIS, this wouldn't be a problem; the app can't be accessed without the user's PIN, and all account information is stored in a secure cloud server, making it no less secure than a banking app.

"Consumers continue to look for innovative new ways to engage with their financial institutions via mobile devices. At the same time, they demand additional security to keep their information safe," said FIS senior vice president Doug Brown. "Information from Cardless Cash Access is maintained in the cloud, so card data cannot be accessed if the consumer's phone is lost or stolen — making this a faster, safer, more secure way to make a withdrawal."

The system has already undergone a successful 37-person trial with Wintrust Financial Corporation in Chicago, beginning in May 2013. It's now set to roll out across Los Angeles, New York City and San Francisco.