Cardless ATM Use Advances With Bank’s Deployment of Mastercard’s Cash Pick-Up Service

The evolution of ATMs away from strictly card-based usage and toward mobile devices advanced Thursday when Fort Lee, N.J.-based Cross River Bank reported that it is the first bank to offer Mastercard Inc.’s Cash Pick-Up service.

The service, which Mastercard announced in September, enables so-called underbanked or unbanked consumers to pick up cash disbursements, including person-to-person payments or such payments as disaster-aid relief, social benefits, or rebates from companies, at ATMs without using a debit card. For senders, the service eliminates the need to send checks or directly provide cash to recipients.

A business or individual initiating a Mastercard Cash Pick-Up transaction creates a cash pick-up order, which alerts the sender’s bank to issue payment. A unique, four-digit PIN is sent to the recipient via text message in a matter of seconds. Upon entering the code into an enabled ATM, the recipient can retrieve the cash without using a card.

Cross River sees the Mastercard service as an addition to its payment services for business customers. In 2015, the bank worked with Mastercard on the launch of Mastercard Send, the card network’s near-real-time payment service.

“Part of Cross River Bank’s strategy is to be first to market with new payment types that can add value to our clients,” Ben Isaacson, senior vice president and general manager of payments, tells Digital Transactions News by email. “We’ve partnered with Mastercard to be very early to market on previous products like Mastercard Send, so it was a natural fit to start this dialogue.”
The bank wouldn’t disclose pricing, but Isaacson says fees “will be different from client to client.”

“We see it as more cost effective than alternatives like sending payments through the mail, and with a much better customer experience,” he says.

In a news release, Dan Goodman, Mastercard’s senior vice president of ATM product management, said “Mastercard has enjoyed a longstanding relationship with Cross River to bring innovative solutions to market. As part of our shared commitment to digital payments and providing the best customer experience, Cash Pick-Up ensures that consumers have immediate access to essential funds quickly, securely, and easily.”

When it announced the program, Mastercard said it would test it in the fourth quarter with partners that included Payment Alliance International, the nation’s largest privately-held ATM provider. Mastercard is also working on making Cash Pick-Up available at ATMs located in stores across the country beginning in 2018. The service is initially certified to run on ATMs manufactured by Hyosung and Genmega. Mastercard also teamed with Pin4, which has operated a similar cardless disbursement system in Spain and Poland under the HalCash brand, to manage deployments.

Researcher Joseph Walent, associate director of the Customer Interaction Advisory Service at Maynard, Mass.-based Mercator Advisory Group Inc., tells Digital Transactions News by email that Mastercard Cash Pick-Up is in line with developments Mercator has been tracking in countries such as Australia and India that involve sending a code to the recipient’s mobile device to retrieve cash from an ATM via a mobile app or online. But it’s the first one that also could involve the payment of wages, he says.

Also, the usage of PINs with text messages “allows for a wider audience when compared to the other mobile cash-access schemes that rely on either NFC [near-field communication] or the quality of the resolution of the screen at the ATM to recognize a QR code,” Walent says. “That said, the use of a SMS text has been seen by some in the industry as a less-secure system with the possibility of intercept.” Fraud, however, probably would be limited to daily ATM withdrawal levels, he adds.