Credit card fraud cost the U.S. retail industry $32 billion in 2014. One of the easiest ways for a scam artist to gain access to credit card information is a “skimmer,” a small device illegally installed on an ATM. Now several banks are going for a technical fix: cardless ATMs. Anindya Ghose, the foremost authority on mobile economics and author of the groundbreaking “Tap: Unlocking the Mobile Economy” (MIT Press, April 2017), details the ways these new mobile-phone-based systems will make retail banking more secure.
In a recent Fortune article, Ghose describes the new systems: “The basic idea is that a code will be generated on the banks’ mobile apps that consumers can use to unlock their bank accounts, enabling them to withdraw money from an ATM simply by tapping their device when they’re in front of the ATM.” The consumer no longer needs to expose their card number, PIN number, or magnetic stripe code to the prying devices of thieves. He also places this advance within the larger context of mobility innovation; even as smartphones are now ubiquitous, “we are still only scratching the tip of the iceberg.” As smartphones continue to advance, Ghose predicts we’ll see even more integration with other devices in our lives, to say nothing of additional wireless functionality and augmented reality.