Digital (contactless) payments were already on the rise in the India after demonetization in 2018.Now, with the ongoing Covid-19 pandemic,a new need is emerging – that of touch-less payment methods.

 With Covid-19 playing on consumer minds, people are rethinkingwaysof handlingpayment transactions without using bare hands. According to US payments giant Mastercard, contactless transactions have grown by 200 basis points in June 2020.

 The monthly bulletin of the Reserve Bank of India revealed that the cash withdrawals from automated teller machines (ATMs) nearly halved to about Rs. 1.27 trillion in April as against Rs 2.51 trillion in March.The sharp dip was mainly on account of the Covidinduced lockdown. Added to that the fear of touchingthe ATM screens perceived to be an easy vehicle forcontamination and transmission of the virus.

 Besides being a potential source of transmitting virus, ATM is also an easy target for fraudsters.According to RBI report of FY 19 – 20people lost Rs. 4.8 crore to bank frauds in Maharashtra.Likewise, people lost Rs 2.9 crore in Delhi. The number of ATM fraud cases in India has shot up from 911to 980since last year. The most commonly used trick is to install skimming devices on ATMs that fraudulently copy the data from bank cards. This data is then transferred to blank plastic cards to carry out illegal transactions.

 So despite all this are we completely shifting towards a cashless economy? The answer is no. According to the RBI report, cash withdrawals from ATMs have increased over the past five years. India is next only to China in the volume and value of cash withdrawals from ATMs.In fact, the percentage of cash withdrawals to GDP has been constant in India at around 17% according to Worldpay report indicating that cash is here to stay.

 Then, how do we make ATM transactions hygienic, safe and secure?The solution is to make contactless ATM technologypossible. This eliminates the need for multiple touch transactionto dispense cash.

 Thecontactless ATMtechnology entails withdrawing money from an ATM by scanning a QR code. In India, touch-less ATM withdrawalsare supported by SBI Yono app and ICICI bank using the finger scanning or SMS banking technology. However, the current technology has a drawback, in that it is intra-operable. This means a customer can use the contactless ATM technology of his bank to withdraw cash only from that bank’s ATMs. For eg. an SBI customer can use the Yono app to perform the transaction remotely and collect money from SBI ATMs only.

 What if contactless ATM technology could be made universal so that transactions can be conducted across any bank? This would be similar to following on the footsteps of‘Bharat QR’– the world’s first payment acceptance solutionmutually developed by NPCI, Mastercard, and Visathat changedthe digital payment landscape.Its most significant differentiator was its universal QR code that made transactions interoperable with all the banks and not a closed-loop system.

The same principle can be adopted in the case of contactless ATM. So how does this work? First, the customer downloads a digital wallet provided by his/ her bank. The installed wallet is linked to the customer’s bank account. The wallet installed on his smartphone or device will contain a QR code.  The customer walks into the ATM and logs into the bank’s wallet using his smartphone or device. He scans the code against the ATM QR code scanner of the bank. The ATM scanner reads the QR code and recognizes the customer. The customer enters the amount to be withdrawn into the mobile wallet. An additional layer of 3D security scan can be incorporated. Once these steps are completed, the ATM will dispense the cash.

This technology ensures two safeguards. Firstly, the customer doesn’t touch the debit cardor the ATM keys to punch the pin number. It also prevents bank frauds through ATM manipulationor stealing of secret pin. Thirdly, it makes payment transactions across banks highly convenient through the use of a universal contactless ATM technology. Contactless ATMs could well be the new normal in a post Covid era.