The beginning of 2016 saw Payment Alliance International (PAI) and Fidelity Information Services (FIS) coming together to gift United States the luxury of accessing ATMs right through their mobile phones. And now, a blogpost by PayPal has revealed that the duty to enable this functionality will be fulfilled by Paydiant, which is also owned by PayPal.

From now onwards, the users of mobile banking at banks will have the option of accessing their ATMs right from the comfort of their own mobile phones This would include BMO Harris, a United States bank based in Chicago.

At time of writing, the cardless ATMs would be available in US only.

According to industry experts, Mobile-driven branch banking provides significant help in engaging consumers without negatively impacting the banks.

Innovations like cardless ATMs could tremendously help in building high engagement among the customers. Such features would allow the younger tech savvy generation of consumers to access in-person banking services right from the comfort of their mobile phones. Additionally, Cardless Cash even reduces the time of transactions drastically, thereby helping improving efficiency and doing away most of the pain points related to branch banking.

Not only will the Cardless Cash feature be highly beneficial to the customers, but it would also help keep costs to banks low. This is because banks will be able to build Cardless Cash right into their own mobile banking apps, meaning they will not have to go through the time-consuming and highly expensive ATM hardware upgrading processes. Furthermore, they will also banks in substantially reducing ATM fraud crimes that arise from “shoulder surfing” or skimming by allowing their customers to enter secure data on a device that is better-protected. This is highly important as according to the latest figures, ATM fraud crimes have risen by a shocking 546% year-over-year in the year 2015.

The the FIS-Paydiant partnership will help PayPal in addressing the needs of the emerging customers in new and innovative ways, thus fulfilling one of its key goals. PayPal has been for long trying to build a payments ecosystem and expand its wings into a number of payments-related arenas, including in-store mobile payments, remittances and peer-to-peer payments.

The Cardless Cash innovation could beautifully fit into PayPal's long desire to provide its users a number of flexible options mostly aligned towards mobile and other such growth favourable areas. This could also help boost the company's profit figures substantially, which is already doing pretty good. PayPal was successful in processing a whopping $86.2 billion in total payment volume in second quarter of the year, and also saw an upward trend in in average quarterly transactions per account.

Further, the partnership would also help to meet PayPal's broader objective of making a move towards digital banking. Recent trends have shown that the millennials are physically walling into their bank's branches more less often than ever before.

[Top Image - Shutterstock]
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