Mobile Cash Access as a Milestone in the Migration to Mobile Banking
The most recent ATMIA Conference USA, held in Orlando, Florida in February 2017, celebrated the 50-year anniversary of the launch of automated teller machines. Much was made of the resilience of ATMs’ core functionality—account holders’ access to their cash assets. For more than a generation the key to one’s personal counting house has been “card and PIN” (something one has, namely the ATM, debit, or prepaid card, and something one knows, namely one’s personal identification number). Into this environment comes “mobile cash access,” which boils down to the substitution of one’s smartphone for an ATM, debit, or prepaid card and its associated PIN to withdraw cash at an ATM. In most cases this functionality is engaged prior to the withdrawal, through the activity known as “prestaging” the withdrawal. A banking customer is able to set up an ATM withdrawal in advance through a stand-alone app or more commonly within the digital banking app of the customer’s financial institution.
Numerous vendor-sponsored studies have demonstrated several benefits of mobile cash access: the speed of the transaction at the ATM is faster when completing a prestaged transaction, the service offers greater physical security to the account holder, and the lack of opportunity for card skimming by fraudsters provides additional account security. Mercator Advisory Group has found that consumers are curious about the service. According to Mercator’s CustomerMonitor Survey Series, roughly 75% of the U.S. adults who are frequent ATM users express being open to trying mobile cash access, as shown by the survey data in Figure 1..
Figure 1: Mobile Cash Access Appears to Have a Receptive Audience in the U.S.
Source: Mercator Advisory Group CustomerMonitor Survey Series, Banking and Channels, 2014–2016, Question 31
In results from the same Mercator Advisory Group survey series, higher frequency of visiting an ATM stands out as the attribute of consumers likely to be willing to employ mobile cash access. With that in mind, enabling customers to set a recurring prestaged transaction amount might help a financial institution (FI) to expand the ranks of regular users of its ATMs. Figure 2 shows typical amounts of cash spent per week by the U.S. consumers surveyed. Simply stopping at the ATM while on regular Saturday morning errands to pick up some cash for the coming week could be integrated more into a customer’s banking habits if it could be preset by the customer for transactions on a regular cadence (which would expire when not acted upon). This capability would be of benefit to customers because of its convenience and it would be a benefit to the FI because it would establish a regular and predictable shared-channel point of interaction between the customer and the financial institution.
Figure 2: Mobile Cash Access Can Support Account Holders' Predictable Cash Withdrawals
Source: Mercator Advisory Group CustomerMonitor Survey Series, Payments, 2014–2016, Question 46
Further, consumers’ use of cash as a tool for adherence to personal discretionary spending limits or a household budget could also be aided through prestaging of mobile cash access withdrawals in connection with an integrated personal financial management (PFM) app. The PFM app could review the prestaged withdrawal amount and suggest a different amount based on preset budgeting goals. Promoting mobile cash access as a way to more efficiently manage funds when not in the impulse-buying mode could be an effective way to promote the service’s usage beyond pointing out its security benefits.
The Mercator Advisory Group research report, Mobile Cash Access 2017: Engaging Customers by Linking Digital Banking to Cash, examines the various approaches to enabling mobile cash access, consumers’ mindset and expectations about such transactions, and how the functionality goes beyond eliminating the card to deliver additional interactive opportunity and assurance.