Wells Fargo launches contactless ATMs to significantly reduce transaction time (WFG)

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Wells Fargo enabled contactless withdrawals from phones or payment-enabled wearable devices at over 5,000 of its ATMs, according to a press release.

Customers can initiate the contactless withdrawals through mobile wallets — including the Wells Fargo Wallet, Apple Pay, Android Pay, and Samsung Pay — and then hold their phones or wearable devices by the NFC-reader at the ATM. Entering a PIN into the machine is required to complete the transaction.

Wells Fargo is aiming to make all 13,000 of its ATMs contactless by 2019, and already launched an initiative in March that gave users one-time access codes via mobile, enabling consumers to use ATMs without physical cards.

The move has the potential to lift engagement for Wells Fargo.

Contactless ATMs are appealing and convenient for consumers. On average, contactless ATMs can decrease transaction times from 45 seconds to 10 seconds, allowing banks, especially those with busy branches, to serve more customers. And their success is proven — those with access to cardless ATMs tend to complete one to two more transactions per month, which is good for banks. It’s worth noting, though, that PIN verification could add time and be a drag on some of these gains.
That could be great for Wells Fargo at a time when it needs engagement. Mobile banking is popular — 43% of all mobile phone users in the US use mobile banking annually, a figure that grows to 67% or more among millennials, according to the Fed. By giving these customers a way to make their lives easier while leveraging platforms with which they’re already familiar, Wells Fargo could see a lift in usage — last year, digital transactions and ATMs were the top drivers of customer engagement for the bank, and so combining them is natural. Additionally, this move follows the firm’s ongoing scandal, which has led to mild attrition and dips in engagement, and could help the bank rejuvenate its customer base and relationships.

But it could also have larger, industry-wide implications. Mobile wallet adoption has been low, stagnating at around roughly a quarter of eligible consumers, largely because customers are satisfied with credit cards or their current payment methods. But mobile wallet-based ATM access is a use case for the products that could actually increase convenience, and might give customers a reason to test the service and then continue to engage with it moving forward, ultimately lifting adoption overall.

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