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Banks testing out new ATMs that use smartphone to withdraw cash

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CREDITCARDS

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NEW YORK — Credit and bank cards may soon be obsolete.

Dozens of banks are testing out a new type of ATM where users can withdraw money using their smartphone, according to Pix 11.

Chase, Wells Fargo and Bank of America are in the process of testing out the “cardless” machines. International Business Times reports that around 2,000 machines will be placed in 28 banks.

Security experts believe the new machines will help reduce credit card fraud by preventing skimming, which is a technique that is used to steal data and money by attaching an illegal device to an ATM. IBT estimates that skimming costs the banking industry billions of dollars a year.

Instead of inserting a card and entering a PIN, customers using the new ATMs would scan a code to receive their money.