As Fexco and First Data demonstrated an ATM this week that lets consumers use a mobile phone instead of a card for access, they emphasized that the bank is at the heart of the offering — everything about the technology could be changed to the bank's whim.
As Lamassu took the same stage to pitch a similar device, which reads from a consumer's mobile phone to access a Bitcoin wallet, a very different message came across: "Our machines are, in a sense, bankless ATMs," said Lamassu co-founder Zach Harvey.
Each company presented its product during the Payments Innovation Day session of PaymentsSource's ATM, Debit and Prepaid Forum, ongoing this week in Las Vegas.
Fexco's Cashebo, which is designed for banks, allows ATM users to perform transactions without the use of a card. The ATM displays a dynamic QR code, which the users scan with a smartphone camera to prove that they are at the ATM. An app on the phone substitutes for an ATM card, providing another measure of authentication. Users still type a PIN. The technology is designed to work with existing ATMs, so there is no need to add cameras or other hardware to allow it to work, said John McCarthy, Fexco's head of innovation.
NCR rolled out ATMs able to communicate with mobile app-generated QR codes in June 2012; Diebold followed in July of this year. FIS also came out with cardless cash access software this year. Several banks already let their customers extract cash from an ATM using a mobile app, including SunTrust, City National Bank, BMO Harris, Wintrust, RBS and Natwest.
Financial institutions can use this approach to blend ATM operations with a mobile banking app, said Mary Knich, First Data's vice president of ATM services.
As consumers increasingly rely on mobile devices, "it's going to make sense to try to attract these types of consumers to your ATM," she said. The system could be adapted for other technologies besides QR codes, but the vendors' goal was to keep things simple for the first iteration, she said.
Harvey's Lamassu machine, which focuses on bitcoin, uses some of the same concepts: consumers use a mobile app to display a QR code representing their bitcoin wallet. The machine reads this code, users put in money, and the machine credits an equivalent amount of bitcoins to their online wallet.
Though Harvey and his brother Josh designed the machine to allow people to purchase bitcoins for themselves, the technology can be used to make person-to-person transfers (by depositing funds to someone else's wallet) or payments to merchants (by depositing to a merchant's wallet). All that has to change is the QR code the user displays to the Lamassu machine.
Despite the colloquial "Bitcoin ATM" moniker placed on the Lamassu machine and others like it, "it isn't really an ATM," Harvey said. "Going from bitcoin to cash turns it into more of what a Bitcoin ATM would be," he said.
However, his company is working to address the security questions of dispensing cash.
So far, Australia and Canada are the markets most interest in the machines, Harvey said. In the U.S., Lamassu machine owners need only comply with the regulations of the states where they deploy the machines, he said.
Harvey and his brother Josh started Lamassu Bitcoin Ventures with a software engineer friend after the pair previously ran a guitar shop, and the company recently made its first sale of the $5,000 hardware and accompanying software.