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Mobile Banking and ATMs Merge as One

What is a Mobile Check Deposit

What is Text Banking

Mobile Banking Security Risks

What is Mobile Banking



Mobile Banking and ATMs Merge as One

The widespread adoption of ATMs, over almost four decades, has allowed customers to conduct a variety of banking activities without entering a retail branch or calling a bank representative.  Mobile banking took that concept another step further by allowing customers to make even more account inquiries and online transactions without contacting a retail branch.

Now these two technologies are merging, allowing bank customers to access an ATM using their mobile phone instead of using an ATM card.  With card-free ATM technology there is no need to have a plastic card with a magnetic strip or smart card with a chip.

Card-free ATMs that use the banking customer’s mobile phone are becoming available through a number of bank ATM networks.  Wells Fargo Bank is the first bank that has unveiled card-free or card-less ATM use throughout its entire ATM network.  Bank America and Chase are also offering services that allow customers to use their ATMs without an ATM card or debit card but have not rolled out their programs throughout their ATM networks.

While a number of different banks are introducing the new ATM services, how the card-free mobile systems work varies from bank to bank.

With the Wells Fargo mobile-ATM access, customers must download and log in to the bank’s app on their smartphones.  When the occasion arises to use an ATM with their phone, the customer requests an eight-digit code which is typed into the ATM instead of using a plastic debit card.  Customers will still enter their personal identification number directly into the ATM to gain account access.

Chase and Bank America are taking a slightly different route to card-free ATM access.  Chase and Bank America are using ATMs with NFC technology (near-field communication).  NFC technology enables devices to exchange information wirelessly over short distances.  With NFC enabled ATMs, the ATM can read information from a smart phone when the phone is brought into close contact with the ATM.

To use the card-free services offered by these banks, customers with NFC-equipped smartphones can sign on to one of several mobile wallet apps such as Apple Pay, Android Pay, Samsung Pay, or the bank’s app.  The customers then simply holds the phone near an NFC enabled ATM, enters their ATM PIN number, and account access is granted.

The advantages of the combination of mobile banking and ATMs includes increased levels of security issues added convenience.  Bank customers don’t need to have an actual card in their wallet or purse to use an ATM and cases of card skimming and fraud are alleviated.

What is a Mobile Check Deposit

Mobile check deposit is a banking service that allows users to make a digital copy of their check or checks and transmit the images to their bank to be posted to their account.  With mobile deposit, the banking customer uses their bank’s mobile application with an approved mobile device such as a smart phone or tablet to make the deposit.  The customer initiates the process through the banks mobile application, takes a picture of the front and back of the check with its endorsement, and then transmits the electronic image to the bank with the information completed on the bank application.  Bank customers do not need to deposit the physical check when using this service.

The basic requirements needed by the consumer to use mobile check deposit is the device to take to take the photo or create the image, an internet connection for transmission of the image which can be done via a wireless carrier or cell phone connection, and the bank with its corresponding mobile application to act as the service provider and depository institution.

When a customer take a picture of the check uses a mobile deposit service, the application and supporting software transmits the check image to the bank and records the check number, the account number, and the bank routing number that identifies the financial institution.  Any image of a check that is transmitted using a mobile deposit application must accurately and legibly provide all the information on the front and back of the check necessary to process the check, including the required endorsements.

Mobile check deposit has grown rapidly with the majority of banks now offering the service.  The feature is usually included as part of the bank’s mobile banking application.  Most banks offer mobile banking services including mobile check deposit as a free service but some banks have fees associated with the service.  Some banks have limitations on the service such as the amount of deposits that can be made daily, the types of checks that can be accepted, and the rules for availability of funds from mobile deposits.  Consumers should check with their bank for its specific requirements.

The Check 21 Act passed in 2004 is one of the biggest factors that contributed to the existence of mobile deposit.  Check 21 allows faster processing of checks by permitting banks to create digital versions of paper checks as a legal document.  With Check 21, a substitute check or an electronic image of a check replaces the original check as it is cleared through the check clearing network.  The check image is a legal copy that can be used in the same manner as the original check.

The benefits of mobile deposit include the time the convenience afforded by not having to visit a bank branch to make a deposit, better management and availability of funds through quick online transactions, and ease of use.

What is Text Banking

Text banking uses text messaging services to allow bank customers to conduct select banking transactions with their bank.  Text banking is performed using SMS or Short Message Service to send short text messages to mobile phones.  Text banking enables a bank customer to retrieve information and manage accounts from a mobile device using the text messaging format.  Text banking can be a fast and convenient way for customers to see a snapshot of their accounts when they are on the go.

Bank customers use text banking by requesting information from their bank by text message which will then be sent back to the account holder from the bank in a text message format.  Account holders can perform transactions by texting a code to the bank to initiate the transaction request, such as receiving the current account balance on their checking account.  Text banking can be used to check account information via text message, receive text alerts, transfer funds and find the nearest ATM or branch for a bank very quickly.

The sender will generally receive the text message response from their bank in a matter of minutes or in even less time than that.  The exact timing of the return text message will depend on the mobile service provider.  Since text banking uses the Short Message Service or SMS format, the transactions can be conducted with or without a smartphone or a tablet computer.  Personal information such as the bank customer’s account numbers or passwords are not shared or transferred via the text messages.

To enroll in text banking, bank customers will need to sign up for the text banking service directly with their bank.  Banks generally do not charge their customers for text banking services.  However, while the bank may not charge for the service, the standard data and text message rates of the mobile carrier will apply for the customer using the service.

Mobile Banking Security Risks

Mobile banking use is increasing dramatically and so are the risks.  Mobile banking channels allows consumers to work directly with their banking products and services in a very convenient and efficient manner which accounts for the wide spread adoption of this means of consumer banking.  The convenience of smartphones and hand held devices has increased the growing popularity of mobile banking and mobile banking apps.  As with all means of electronic communications, there are some risks associated with the transactions on hand held mobile phones and other devices. 

While the current level of risks with mobile banking is low, the losses that can occur can be devastating.  Greater consumer awareness is the first line of defense against mobile banking fraud.  Being aware of the risks, frauds and scams that can take place with mobile banking can help mobile banking users ensure their banking information remains safe and secure.

One of the most pervasive security risks originated with online banking.  Phishing schemes are one of the current risks that are present with online banking that has morphed and adapted to mobile banking.  With phishing schemes, the scamming operation or fraudster sends some form of bait to the mobile banking user in order to illicit response that allows them to obtain their users bank records.  Mobile banking phishing may start with a bogus text message that tries to trick the recipient into replying with financial or personal information.  The phishing text message may also be deployed to trick the mobile banking user into clicking on links that will sneak viruses onto the mobile device that will extract relevant banking data without the user’s knowledge. 

Tied to the phishing schemes are bogus or fake web sites.  These fake banking web sites are developed and published in an attempt to steal the consumer’s online banking credentials.  Used in conjunction with the phishing schemes, the fraudster can send a bogus text or email and have the recipient respond to a fake bank web site that will capture the data entered by the consumer.  Some of the fake web sites and official looking emails that are sent by hackers to consumers are highly detailed and are designed to be a copycat the bank’s actual web site, logo and corporate headquarters. 

The number one reason for expanding mobile banking is the shear convenience offered by the light weight and easy to transport mobile phones and tablets and it is that convenience that leads to added security risks.  With their light weight and small size, these devices are easy to lose or steal, which can put the banking information stored on the device at risk.  Thieves target tablets and mobile phones for more than the value of the device but the data held on these devices.  With smartphones, it is not uncommon for user to store their password information right on the phone unlike many PC users.  Once the information on a stolen mobile phone is unlocked, the thief may find easy access to bank accounts and other financial records. 

It is likely that mobile banking will come under more intensive attacks as the transactional capability expands in the mobile channel.  Fortunately, most banks and financial institutions work aggressively at keeping their mobile technology and experiences for their consumers convenient and secure.  Consumers should take precautions with their mobile banking activities and look to their financial institution as a resource for information about mobile banking security and safe practices.

What is Mobile Banking

Mobile Banking refers to banking services that are performed on mobile devices. Mobile banking requires some form or internet connectivity on a mobile platform to perform banking operations. Mobile banking is most often performed with mobile phones but also cover other wireless internet enabled devices such as tablet PCs.

Mobile banking services can cover any banking service that is performed or delivered over the mobile web. Mobile banking operations or tasks may include simple text based inquiries or direct deposit transactions and financial transfers.

Mobile banking has increased in conjunction with the increase in online banking as well as the increased production of internet enabled phones and wireless computing devices. Mobile banking is the next step in online banking. With mobile banking customers don’t need access to a computer terminal to access their banks services and products.

Mobile banking access allows customers to conduct traditional in-branch and online transactions such as account balance inquiries, funds transfers between accounts, and transaction viewing. Mobile banking access can often support a variety of bank account types, including checking accounts, certificates of deposit, money market accounts, loans, and lines of credit.

Mobile banking services provides customers the flexibility and convenience to manage their finances with greater flexibility by making it easier to allow bank consumers to perform bank functions whenever and wherever they choose.

Depending in what mobile banking is offered by the financial institution, it will almost always include non-transaction based services as well as transaction related services.

Non-transaction based mobile banking services are informational services and often include; account balance inquiries, transaction history inquiries and notices of recent activity within an account.

Transaction services that can be performed with mobile banking covers a wide range of transactions which are dependent on the capabilities of the mobile banking platform. With some facilities, users can deposit checks virtually by taking a snapshot of the front and back of their check for deposit. More commonly, mobile banking platforms allow users to move money between their accounts, to pay bills from their phone and make information requests.

Additional resources regarding online banking can be found at online bank services, online checking accounts, the best online bank or the best online savings account.