Traditional ATMs used to dispense cash only when a user put in their physical card and entered a PIN number. Those days are long gone, since cardless ATMs are paving the way for a more convenient banking experience by enabling Google and Apple Pay transactions.

Cardless/contactless ATMs

Cardless technology is found on contactless ATMs, which allow customers to tap their phones to activate an RFID reader. The machine uses a variety of technologies to read the data, but the most common one for cardless ATMs is near-field communication.

Finder.com identifies other ways ATMs can connect with customer's phones including app-generated codes, QR codes or at times biometric authentication that scans fingerprints or eyes.

How to use Apple/Google Pay at an ATM

In order to use Apple or Google Pay at a cardless ATM, customers simply need to open their Google or Apple Pay Wallet, make sure the right debit card is selected and then tap the phone against the contactless symbol for the ATM.

From there, the customer will need to enter their PIN number as usual. Of course, this will only work on ATMs that have near-field communication readers.

Benefits of Cardless ATMs

Cardless ATMs have many direct benefits to a customer, ranging from security issues to convenience, making it a cornerstone of modern banking customer experience strategy.

A report by Capital One identifies three benefits in particular: avoiding the touchscreen so there is less chance of spreading germs, removing the need to carry your physical wallet with you, and acting as a one stop shop — since customers already use their digital wallets for multiple purposes.

Contactless ATMs are also faster since customers do not have to pull out their physical cards.

"Contactless improves the user experience by making it faster, safer and secure. Contactless ATM access also improves transaction processing speed and convenience. And, contactless take less than half a second and is faster than inserting a chip card. Faster and improved self-service experience can lead to increase in loyalty and ATM usage," Terry Pierce, product management director of Co-op Solutions, told ATM Marketplace.

Where can you find Cardless ATMs?

There are many banks that use Cardless ATMs, but you will have to check your individual bank's website to find out precisely.

For example, Bank of America accepts Google Pay for ATMs and JPMorgan Chase accepts Apple Pay, Google Pay and Samsung Pay, according to a blog from Finder.

Many banks, such as JPMorgan Chase provide a find an ATM feature that you can use to search for ATMs, which will provide information on the individual services the ATM provides.

Are Cardless ATMs secure?

Cardless ATMs are in many ways more secure than traditional ATMs. For example, many criminals utilize some form of card skimmer, which can capture card swipe data when the customer inserts their card.

In addition, some criminals use tiny cameras to capture the user's PIN number when they enter it. Using these tools, criminals have stolen vast sums of money from customers.

With cardless and contactless tools, customers are not using a physical card, and they are entering their PIN number on their phones, so there is no chance of skimming occurring. This makes it far more secure than traditional transactions.

"It reduces the number of EMV fallback transactions and fraud losses due to skimmed cards," Pierce said. "Contactless provides the same security embedded with the use of an EMV chip."

In addition, by using a phone instead of a physical card, it protects customers from a new scam: glue and tap. In this fraud, criminals put glue over the card reader on the ATM then they tell the victim to use the tap feature on their card. However, if the victim leaves without logging out of the machine, the thief can access their account and steal their funds.

Are there any cons?

No technology is perfect, and cardless features are no different. For example, not every bank has contactless ATMs available, and these branches will not work with Apple or Google Pay.

In addition, phones can malfunction which could interfere with their ability to complete an ATM transaction.

Lastly, while you won't be at risk from skimming, phones can still be hacked or stolen. As a result, customers should consider all security risks and benefits when picking what method to use to interact with an ATM.