As mobile banking and digital wallets become more common, smartphones will increasingly be the key to unlocking cash on the go.

Wells Fargo’s launch this week of cardless capability to its 13,000 ATMs across the U.S. is the latest example of how banks are touting the technology as the next big thing in consumer banking. The sales pitch notes that they save time, and since no card enters the machine, it’s harder for a fraudster to steal the card details. But cardless ATM banking in the U.S. is still far from the norm, largely due to technological and cultural hurdles.

“You need look at your customers and what stage they’re at,” said Andy Brown, marketing director of payments for NCR Corporation, a major ATM manufacturer. “The bigger challenge is the U.S. market. There’s not a high take up of contactless — you’ve probably got to do an educational exercise.“

The move from using a card to a mobile phone to access an ATM is seen by many industry watchers as the next step from contactless cards, or the ‘tap for cash’ capability. But since contactless cards have yet to catch on in the U.S., getting a customer to wave a smartphone to get cash at the ATM may not happen immediately.

“Customers want to do it stages,” said Brown. “When they are used to doing contactless then they can move on to next stage.”



Other countries, including Australia, have successfully rolled out cardless ATMs accessible through NFC-capable phones, but they have made the transition from contactless cards, said Brown. So while many ATMs shipped to the U.S. are capable of doing transactions initiated by mobile wallets, it’s not a feature all banks have chosen to make live. By contrast, cardless ATMs that can be accessed by digital wallets have been out in Korea for over a year.

“It’s certainly not an overnight challenge to solve,” said Devon Watson, vp of global strategy and operations at ATM manufacturer Diebold Nixdorf. “In terms of their payment habits, consumers are a slow-moving wave.”

Apart from the user adoption curve, technological roadblocks may also hinder the move towards cardless ATMs in the U.S.



“The ecosystem overall needs to know how to digest that transaction type,” Watson said. “Banks need to enable ATMs to interact with an NFC-enabled phone, that’s one piece of it, but the other that’s probably the bigger inhibitor are the transaction networks themselves — the processors that have to be able to route and process that transaction.”

U.S. banks are nonetheless pouring money into the cardless wave. Bank of America, which currently has 8,500 ATMs that can be used with digital wallets, says its goal is to allow all of its ATMs to have this capability. Wells Fargo said it will be eventually be moving to cardless ATMs capable of being accessed with NFC-capable phones, but for now, the only way to access a Wells Fargo ATM without a card is to log into the mobile app for a temporary code. Others, including JPMorgan Chase, are cautiously going cardless, with Chase piloting a feature similar to the Wells Fargo app-activated cardless ATM.

Given these barriers, mass adoption in the U.S. is still far off. Analysts say U.S. cardless ATM trials, including a 2013 Diebold Nixdorf pilot with QR codes, show U.S. customers are interested, but widespread adoption is still years away. What’s more likely is that U.S. banks will offer it as a value-added service.

“At this point, cardless ATMs are primarily a kind of emergency rather than a regular feature — for instance, if you don’t have your card,” said Dominic Hirsch, managing director of RBR, a research and consulting firm that specializes in retail banking. “You’ll see more and more banks will market this as an additional service — it’s not critical but a nice to have.”