Credit card fraud is one of the most common financial crimes in the U.S. today. In response to this problem, Diebold Federal Credit Union is unveiling a new type of automated transaction machine (ATM) designed to prevent theft of credit card data, known as skimming.
The ATM doesn’t use credit cards; instead, it has you verify your identity by taking a picture of a QR code presented to the ATM with your smartphone. This is only one of the features of this machine, which is aimed at serving technophile Millennials.
Many of the features of the new Diebold ATM are impossible with other kinds of ATMs. This one will allow you to exchange money with your friends by providing them with a code they can use to access a predetermined amount of cash.
The machine comes at a time when the financial sector is more data-based than ever before. With services such as PayPal and currencies like Bitcoin making the news every few days, credit-card-based ATMs may soon go the way of the dodo.
Credit card fraud is an all-too-common nuisance
Fortunately for consumers, any credit card fraud that can be proven will be removed from the victim’s bank record pending an investigation into the matter. While customers are not liable for any charges generated as a result of such an alleged fraud, that doesn’t mean that credit card fraud doesn’t pose a nuisance.
For one thing, personal information can be stolen during a credit card breach, resulting in greater headaches that could haunt a person for years.
Some banks have been skeptical of credit card fraud claims. Given a total of 1.5 million claims of credit card fraud per a year, 10% of claims are wrongly denied by banks. People who are already facing intense distress from having their accounts compromised must also deal with an interrogation conducted by uncooperative bank representatives.
Frustration with banks leads to other high-tech solutions
In addition to attempts by the banks to change their technology, many frustrated consumers are contributing to a new approach to financial management by shifting their focus to alternative currencies, like Bitcoin. It’s an untraceable currency that's “mined” from computer activity.
Over the last year, Bitcoin has gained popularity on the grey market. Worried that the emergence of this new currency may disrupt financial markets, regulators in countries across the globe are attempting to crack down.
However, the anonymous nature of the currency makes it difficult for banks and government institutions to disable the currency, whether or not they can aid consumers.
This makes the emergence of Diebold’s ATM of all the greater interest to banks. As the Internet increasingly makes consumers less tied to their bank, it may become more difficult to manipulate the law to the banks’ advantage than in the past, when it comes to customer retention. Exploring alternate avenues that benefit the customer’s lifestyle may be the only way for traditional banks to thrive.