The Reserve Bank of India (RBI) made a recent announcement that account holders can soon withdraw money from ATMs without any card, but by using their mobile phones and scanning a QR code. RBI has asked banks and ATM operators to include an option of interoperable cardless withdrawal at ATMs.
A recently released RBI notification reads the National Payments Corporation of India will provide integration of the Unified Payments Interface (UPI) platform with all banks and ATM networks. While the UPI would be the mode of customer authentication, the settlement would progress to be through the National Finance Switch (NFS), which is the mainstay of ATM networks in India.
Using the bank’s mobile app, several banks are already offering convenience for cardless withdrawal to their customers. It is said by the RBI authorities that this was an additional choice and a security feature. Moreover, this QR code process is helpful to get rid of fraud like cloning cards from data or placing devices over the card slot in the ATM to read the card details.
The ATM operators opine that the new facility would gradually increase the cost of ATM transactions for banks, while customers would not face any additional charges. Earlier, when an account holder withdrew cash from his own bank’s ATM, the transaction took place within the bank’s network. Now, even for own bank transactions, there will have to be one leg of the transaction which travels to the UPI platform.