Account-holders will soon be able to withdraw money from ATMs without a card by scanning a QR code with their phones. The Reserve Bank of India (RBI) has requested banks and ATM operators to offer interoperable cardless withdrawal options at their machines
The RBI announced in a circular that the National Payments Corporation of India (NPCI) will help banks and ATM networks integrate the Unified Payments Interface (UPI) platform. While the UPI would be used for client authentication, the National Financial Switch (NFS), which is the backbone of the country’s ATM networks, would still be used for settlement.
The majority of the other rules, such as those governing withdrawal limits at third-party ATMs, would be comparable to those governing ordinary ATM card transactions. Several banks currently provide consumers the option of making cardless withdrawals through the bank’s mobile app. Customers can withdraw money from any bank under the new framework, which establishes a common norm
The RBI does not believe that the cardless withdrawal option will eliminate the necessity for cards. Officials from the RBI stated that this was an additional choice as well as a security element. Fraudsters have cloned cards from data or placed devices over the card slot in the ATM to read the card information in numerous phishing cases. Skimming frauds would be eliminated under UPI.
Another benefit is that customers would not be inconvenienced if their cards were not issued on time. Due to a global chip shortage, banks are currently experiencing card supply challenges. If there is a large-scale re-carding to be done in the event of a data breach, as has happened in the past with various institutions, this QR code withdrawal might be useful.
The CEO of an ATM manufacturer told TOI that the implementation would not necessitate any hardware changes and would just necessitate a software upgrade. “It won’t be like an app upgrade on a phone; while the application can be pushed through remotely, there will have to be some client-side testing,” he explained.
The CEO of an ATM manufacturer told TOI that the implementation would not necessitate any hardware changes and would just necessitate a software upgrade. “It won’t be like an app upgrade on a phone; while the application can be pushed through remotely, there will have to be some client-side testing,” he explained.
Debit cards, according to bankers, will continue to be relevant since they are used for more than simply cash withdrawals. While QR code payments are becoming more popular for in-store purchases, cards are still utilised for many transactions. In India, ‘card not present’ transactions account for more than half of all card transactions. Cards on e-commerce sites, utility websites, and mobile apps are examples. A top banker stated that QR code withdrawals from their banking app will be allowed as a security feature. This would increase the number of people using their digital platforms. PhonePe, Google Pay, and Paytm currently handle the majority of UPI transactions.
