New banking technology is all about speed

The security issue revolves around the technology used in contactless cards called radio frequency identification, or RFID. It is used mostly in the warehouse and distribution industry to track goods because of its radio signal that can broadcast widely and at high speeds to track inventory all over a warehouse or store.

The RFID in contactless cards has a far weaker radio frequency, which reaches no more than a few inches from the card reader. And each transaction is encoded with its own special dynamic pass code when connecting with the reader, meaning no one else can pull the number out of the air and use it without the card. “The RFID chips are not broadcasting info but they are providing security to the card,” said Friedman. “And if the card is used for anything over $25, the merchant must still take a signature.”

And as with any type of credit or debit card, a contactless cardholder is not responsible for unauthorized purchases if the card is lost or stolen.

Hold the deposit envelope
Banks are also introducing advanced ATMs with no-envelope deposits. The benefits: Your receipt shows a copy of your deposited check and the numbers and denominations of deposited cash bills. Plus, you get faster access to deposited funds.

“It’s an easier process and there’s a greater comfort level because you can see the image of each check on your receipt, said Bank of America spokesperson Betty Reiss. Bank of America has tested 250 of these machines in the Carolinas, Phoenix, Atlanta and Washington, D.C. over the past year and will continue to roll them out nationwide this year and next.

The new ATM technology is expanding rapidly because of the new Federal regulation popularly known as “Check 21”, which allows the image of a check to be as legally valid as the check itself. Now when consumers deposit a check, the check image can be electronically transferred to the issuing bank, which will clear the funds in much faster time.

The new machines also quell legal concerns about the one-sided receipts from standard ATMs, because they only reflects information you keyed in on the keypad and fail to legally prove you actually deposited that actual amount.

With the new technology, you don’t need to key in an amount. Just insert your money into a slot and the machine sorts, counts and verifies it. The scanned check images and your total deposit amount appear on the ATM screen. You must confirm whether the amount is correct. If not, you can cancel your transaction, and the machine quickly spits out your cash. If you experience a mechanical failure or another problem while making a deposit, the ATM logs a record of your information as well as the machine malfunction.

Like contactless credit card readers, these new ATMs are not cheap to install, but banks are betting they’re worth the cost. In its year-long pilot, Bank of America found that the number of new ATM deposits increased an average of 50% per day.

Friedman thinks the new machines will replace the standard ATMs. “Customers are finding it much easier and more convenient. And banks don’t make big tech decisions without proven business cases.”

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