NFC Expert Who was the first
An ATM is a device whose main purpose is to dispense cash. It first appeared in 1939 at the City Bank of New York. But the bankers did not accept the novelty, since at that time the issue of synchronizing cash withdrawals and the balance of money in the account remained unresolved. And in the next few decades, the development of technology did not allow to solve it.
The second time an ATM appeared in London in a branch of Barclays bank in 1967. It was invented by John Shepard-Barron while observing the operation of a chocolate vending machine. The principle of operation of the device was to exchange a special check for cash. At that time, the cash withdrawal operation was limited to 10 pounds.
The personal identifier, inextricably linked with payment cards, appeared only two years later. An engineer from Scotland, James Goodfellow, came up with the idea of using a six-digit secret number to protect information from fraudsters. But as the legend goes, his wife had difficulty remembering the numbers, so the code was reduced to 4 digits.
In the 70s, American banks began to actively use ATMs, and already in 1975 their number reached almost 3200 pieces. In 2011, the total number of cash dispensers worldwide reached 2.4 million. In Russia, the first cash dispenser appeared in 1994 and belonged to Most-Bank. As of January 01, 2017, the number of ATMs in the territory of the Russian Federation amounted to 207,694 units.
Over time, they became more complex, they had more and more new functions, such as account replenishment, transferring money from one account to another, replenishment of mobile phones, payment for other services, etc.
Therefore, it is not surprising that when the trend for contactless payments appeared, bank specialists thought about equipping cash dispensers with the appropriate functions. Alfa-Bank was the first bank to start testing contactless ATMs.
What are contactless ATMs?
Outwardly, a contactless ATM does not differ from a conventional ATM. Its main difference is that to withdraw cash (and any other operation) you do not need to insert a card into the card reader. Instead, you need to attach a card (or smartphone) to a special reader, enter a pin code, select the required service on the ATM screen.
Of course, in order to use contactless ATMs, it is necessary that your bank card supports this payment method. In the case of a smartphone, the card must be tied to it via Google Pay or Apple Pay.
Contactless ATM in Russia
Alfa-Bank
The era of contactless ATMs in Russia began in the summer of 2015. It was then that Alfa-Bank began testing contactless technology in its ATMs.
And as of December 21, 2015, the financial institution had 120 such devices in its network. But they only worked with Mastercard PayPass payment cards. But Alfa Bank’s contactless ATM began accepting Visa payWave cards only in April 2017.
But the bank’s management promised to equip at least 15% of its ATM network with the necessary software and equipment by the end of the year so that Visa cardholders do not feel left out.
ATMs with contactless payment in 2017, in addition to Alfa-Bank, were also tested by other financial market players. After all, its cost is practically the same as the classic cash dispensers. An estimated one contactless ATM will cost financial institutions $10,000.
Are these ATMs safe?
According to Luka Safonov, Head of the Practical Security Analysis Laboratory at Jet Infosystems, the contactless authorization form used in ATMs has proven itself well.
“It is safer than classic mechanisms with a card reader and a pin-pad (remote keyboard – ed.), For which there are many fraudulent devices, such as skimmers, shimmers and others,” he says.
Transactions in contactless ATMs are protected by a special standard, which is almost impossible to interfere with. Especially if you use a smartphone: fraudsters will not have the opportunity to find out your card details, since almost every gadget is protected by a password, Face ID and the owner’s fingerprint recognition function.
In order to get someone else’s personal data, attackers install special overlays on card readers that copy the card number, its validity period, CVC code and the owner’s surname/name. Do not put such an overlay on the contactless card reader.
What a contactless ATM can do
As conceived by bankers, a contactless ATM should carry out all the main types of operations that are inherent in a standard device:
- cash withdrawal;
- balance check;
- transfers to other cards or accounts;
- replenishment of accounts.
In order for an ATM to perform such functions, it must be equipped with NFC technology (an abbreviation for Near field communication from English – near contactless communication). With its help, the device will be able to service contactless cards:
- Mastercard PayPass;
- Visa payWave.
Which are tied to a smartphone, watch, bracelet or simply in the form of a standard plastic card. Also, in such ATMs, you can withdraw money from Yandex virtual cards. Money or Qiwi, but for this, the phone must have an appropriate application, for example: Yandex Wallet or Qiwi Wallet.
What is the convenience of contactless ATMs?
Firstly, there is no risk of card jamming in a contactless ATM. And it can remain in the terminal for a number of reasons: if the PIN code is entered incorrectly, during fraudulent activities, if the card or the ATM itself is defective. Secondly, contactless transactions prolong the life of the magnetic tape of the card.
In addition, in contactless ATMs, there is no risk of forgetting the card: you put it on the reader once, entered your PIN code, and withdrew money. By the way, this also saves time.
Finally, if your card is tied to a smartphone, you don’t have to carry it around with you. This is additional protection against scammers.
Which smartphones does it work on and how safe is it
There is nothing complicated in the operation of a contactless ATM. How to use a contactless card at an ATM? Just like paying at the store. You need to bring the card to the icon with the image of waves and that’s it, then carry out transactions at the ATM, as usual.
Or, the user of a PayPass or payWave type card must have the corresponding mobile application on his smartphone (Android OS version 4.4. and higher, or IPhone 6 and newer models).
Contactless ATM of Alfa Bank allows using cards of both payment systems for cash withdrawal or other transactions. It is only necessary to activate the application before the operation and bring the smartphone to the NFC device, usually it will be indicated by radio waves. After that, a field for entering a PIN code will appear on the ATM screen. Well, then everything is done the old fashioned way.
As for withdrawal limits, they depend on the type of plastic card and payment system. So with the help of a virtual Yandex. Money can be withdrawn in one operation from 5,000 rubles (anonymous wallet) to 100,000 rubles (the client is fully identified).
Alfa Bank’s ATM dispenses no more than 40 banknotes in one operation. So, the restriction on cash withdrawal also depends on the technical parameters of ATM devices.
The answer to both of these questions is, in fact, simple – it all depends on the vendor’s payment system itself.
That is, if your smartphone supports Apple Pay, Samsung Pay or Android Pay, then you can withdraw or deposit cash at one of our new ATMs using your smartphone. If payment on the pinpad in the store works with the help of a watch, then it will be possible to use them with an ATM.
The same applies to security – everything related to the safe storage of a bank card token on the device is provided by the vendor itself.
An additional protection against unauthorized access to your account from an ATM is the need to enter a PIN code from the corresponding card during any operation. For example, if in a cafe you can pay for a cup of coffee with a simple touch, without a pin code, then interacting with an ATM will require you to enter a code even if you want to withdraw 100 rubles from your account.
What you need to know when using contactless ATMs?
You need to understand that the mere fact that you have a contactless ATM in front of you is not a 100% guarantee against scammers.
“Before withdrawing money, you need to be sure that this is a legitimate ATM, and not a copy of it, created for fraudulent transactions.
Verifying the authenticity of the device is very simple: you need to go to the website of the bank that issued the ATM you plan to use and look at the list of terminals. You can also do this in a mobile application or by calling the hotline of a financial institution,” says Safonov.
Advantages and disadvantages
The positive aspects of contactless ATMs are:
- no need to carry a plastic card;
- high level of cash withdrawal security. Attackers using cameras or readers will not be able to read information on the card. After all, the user will not insert it into a special device;
- no additional withdrawal limits;
- speeds up the withdrawal procedure.
The disadvantages include:
- only a small ATM network is equipped with NFC technology;
- to access the ATM menu, you need an additional device (smartphone, watch, bracelet), which will cost a lot. Or money can be withdrawn with the contactless card itself, but the whole point of the new method of cashing out is lost.
A contactless ATM is another stage in the development of banking technologies, which are aimed at increasing the speed of customer service and improving its quality. With their help, financial institutions want to further attract the attention of potential customers. And for this they use innovative technologies that are gradually, but bringing the future closer.
Today, contactless payments are in trend. They not only speed up service, but also increase the security of transactions when using cards with PayPass or payWave technology or virtual cards.
Intruders using cameras or readers that are attached to the card reader will not be able to read information on the card. After all, the user will not insert it into the ATM.
Now many banks are actively testing contactless technologies: Alfa-Bank, Sberbank, VTB24 and Tinkoff Bank. Alfa-Bank can already boast of the successful implementation of the project. The field of contactless customer service is interesting in itself and will continue to develop.
Already in the near future, bankers are planning to introduce a keyless ATM. This device is intended only for contactless access to his account, which the client receives using a smartphone. The card user simply performs all the necessary actions on the screen of his phone using a special application, and the ATM “obediently” performs all received commands.
Alexander Babin
How it all started
Thoughts that it would be nice to gradually transfer payment processes to contactless came to us during the first Alfa Future People festival. Then this idea fit well into the concept that there should be no cash on the territory of the festival. It was proposed to pay with a bracelet.
The guest of the festival at the entrance received a bracelet and a card attached to it (MasterCard). A smart card was built into the bracelet, which made it possible to pay by touch at the festival outlets. Thus, both a pass to the festival and a wallet were obtained.
It was 2014, and then the ability to deposit or withdraw cash at an ATM was extended from bracelets to our MasterCard PayPass cards, after which VISA was also finalized.
A new round of development of payments by touch was set when vendors were actively involved in the matter. On September 9, 2014, Apple introduced Apple Pay, which not only proved its worth, but also set another trend. Samsung decided to keep up, as a result of which the world saw Samsung Pay, and now Android Pay is also working in the Russian Federation.
Users who appreciated the convenience of such payment at the checkouts could not help but start asking questions about the possibility of interaction between a smartphone and an ATM.
Negotiations
We talked to the guys from Apple and explained to them what and how we want to do. The idea was received with enthusiasm.
All processing improvements were tested on Apple Pay, so after the release of Samsung Pay and Android Pay, there were no technical difficulties, and in fact, the entire connection of the new system to ATMs depended only on the success of negotiations with the vendor.
When you do something with the expectation of being the first in the world to launch, the speed of work will play a rather important role. In the view of the majority, all the processes associated with banking and the introduction of something new should be rather leisurely – here are the very specifics of the banking sector, and the bureaucracy inherent in it, and many other factors, each of which in one way or another slows down the progress of work.
In our case, everything happened so quickly that we first did something, implemented and tested, and only then wrote all the necessary documentation and made possible adjustments from the vendor.
Here we must pay tribute to our contractor, BPC Banking Technologies, who did his part of the work with maximum efficiency.
As a result, everything about everything in the case of connecting Apple Pay took us a month. In April 2017, we go to Apple, and in early May we conduct the first live tests on ATMs.
Where you can try it in action
As of the beginning of July, we have installed 20 such terminals in Moscow so far, with a total of 300 in Russia. Priority in installation is given to Alfa-Bank branches, but ATMs are also installed in business centers.
In order to find such an ATM on the map, we made an additional filter on the website. Soon it should appear in mobile applications.
These ATMs will stand out visually with the help of special stickers, it will also be noticeable that a reader is installed under the card slot.
There are some oddities here, because people get used to the appearance of ATMs, and they begin to suspect something if some additional detail suddenly appears on their favorite device. Whether it’s a reader or an anti-skimmer, it’s still something new for the user, which means it’s suspicious.
By the end of 2017, we plan to increase the number of such ATMs to 700. The restructuring of the ATM network itself is carried out in two ways – this is the installation of the latest models of ATMs, and the upgrade of current ones (the corresponding software reader). Moreover, in the case of an upgrade, the cost of such a refinement is approximately 5% of the price of a new ATM.
Now a couple of weeks have passed since the official launch, so it will be difficult to show any detailed statistics on the use of this function, but general information makes it clear that they are starting to use it more and more actively. And not so much in the test mode “Let me try to withdraw a thousand with a smartphone”, but also on fairly large amounts – there were withdrawals of about 100,000 rubles using Apple Pay. So far, we are inclined to believe that this particular Pay will become the most popular among users, but time will tell.
What’s next
There are plans to introduce so-called topless ATMs into the ATM park. Contrary to expectations, such an ATM will not have a pretty assistant nearby to help you withdraw or deposit cash, it is just an ATM without a top (no screen and no keyboard). Similar ATMs are already in use in some countries.
How it works – all operations (choosing the desired action, a specific amount, etc.) are carried out on the smartphone screen through the bank application. After clarifying all the details, it remains only to bring the smartphone to the ATM reader and receive or deposit cash. The ATM itself is a rectangular box, which has only a reader and a compartment for receiving and dispensing banknotes.
By the way, this gives a small plus in terms of security. If earlier cameras could be installed above the keyboard at a specific angle, recording your pin code for an attacker (or even using a fake keyboard for the same purpose), then entering a pin code and other data from the screen of your smartphone cuts off this vulnerability.
Like the skimmer problem – no card slot = no one is cloning your card’s magnetic stripe. Of course, there is a non-zero probability that with time and the growing popularity of contactless, miniature NFC skimmers will also appear, this is inevitable, like an eternal confrontation between sword and shield. But, frankly, the level of data protection in a token and in a magnetic strip is very different.
Of course, we expect the appearance of similar ATMs among our colleagues in banking. But as for the spread of this around the world, the following trend is still observed. The strongest development of ATMs is in Asia. Some new functions and experiments most often appear there (but in the case of replenishment and withdrawal via a smartphone, we still became the first in the world).
The West, despite the fact that ATMs first appeared there, is progressing in terms of ATMs not so actively. This is largely due to the fact that their ATM fleet has gone through all the stages of evolution, from the first ATMs that processed checks (which is what they were invented for) to the ATMs that you can see in the US now.
Barclays Bank, 1967, photo – AP.
This thing was the world’s first cash dispenser for the public. The user inserted a check into the slot and received cash. Cash at the same time was limited to 10 pounds, because at that time it was not possible to check how much money the client had in the account in principle. But already at that time they were fighting against fakes, and these checks that the bank issued were marked with the carbon-14 isotope.
Now in the US, the situation is such that most of the cards used are with magnetic stripes, not with chips, not to mention contactless. By the way, it is for this reason that cloned cards are taken for cashing out from the Russian Federation to the USA. Let’s say you have a card with a chip. Somehow, in an ATM installed not in the most reliable place, you got into skimmers that read the magnetic stripe and pin code, after which the attacker made a clone of your card using a blank.
So, the use of this clone in the Russian Federation will be useless – banks have data that the card is also protected by a chip, so it will not be possible to withdraw money from the clone through an ATM. But you can take a clone to the USA and cash it out there, without checking for a chip.
Now the ATM network in the US is so huge that it will take a huge amount of money and time to modernize it. Together with a certain conservatism, we have what we have – a noticeable lag behind the rest of the world in working with maps.
Why we were more fortunate – because ATMs began to appear actively in our country in the 90s of the last century. We started with fairly normal technologies, which we managed to develop in accordance with the needs of users and our ideas. Therefore, now it is much easier for us to introduce something new.
What we try to do.
https://www.youtube.com/watch?v=tsE8-3nGG9s
PS By the way, if you want to take part in the development of such solutions, we have recently opened several new vacancies, perhaps we need you.