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Interoperable cardless cash withdrawal at ATMs likely to see takers in millennials, rural population

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Contactless payments are set to get a further boost with the Reserve Bank of India’s (RBI) plan to enable cardless cash withdrawals from ATMs. Although the facility has gained traction during the pandemic, players believe it will now see more usage and adoption, especially among the younger population and in rural areas.

“It’s another channel or another platform for customers to access cash. In the new approach, cash is always withdrawn from ATMs; the change is – instead of physical debit cards, customers can use a UPI-based QR code to withdraw cash,” said Ashish Ahuja, COO, Fino Payments Bank, adding that this will further simplify banking operations.

“This form of cash withdrawal will inherently appeal to the new generation who are digital savvy and experimenting with new initiatives. on UPI,” he added.

Rustom Irani, MD and CEO of Hitachi Payment Services, said such withdrawals would also help the rural population, as many of them do not have or use debit cards. “This will contribute to greater financial inclusion. At Hitachi Payment Services, we plan to provide the installation to our white-label ATMs soon,” he said.

QR code scanning

The RBI said the facility will be based on UPI and details are expected to be announced shortly. According to industry players, this will be based on QR code reading. “We believe QR codes are the future of the banking and payments industry for their inherent ease of use and to facilitate secure cashless transactions,” Ahuja said.

A report from SBI Ecowrap says it also expects it to work as an ATM QR code scanner through UPI to withdraw cash from any ATM. “Furthermore, the introduction of a dual-layer SMS and password withdrawal feature on SBI’s YONO Cash Line could do wonders for various customer segments,” he added.

Banks offer a service

SBI was the first bank to launch the facility in 2019, in which customers could withdraw money through the YONO app. It has grown in popularity during the pandemic, and a handful of other banks offer the service, such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, RBL Banks, and Bank of Baroda. But most players use different technology.

“Contactless and contactless means of payment have grown in popularity since the pandemic. A cardless cash withdrawal system also allows people to not worry about the safety and security of their debit cards. People don’t want to touch anything as much as possible and this will solve this problem,” notes a banker.

Depending on the bank, amounts between ₹10,000 and ₹20,000 per day can be withdrawn using the service. Customers usually have the option of withdrawing funds at the bank’s ATM or at specific stores.

Published on

April 10, 2022