There has been much written and talked about over the years about the use of skimming devices and cameras being installed on cashpoints (ATM’s for my international readers), their increasing complexity and ability to seamlessly blend into the cashpoint itself. With the card being entered and read, and the PIN code either intercepted with lay on keypads or filmed with cameras, the criminals ability to clone cards is quite significant, and the financial rewards high. Most of us, if we were honest, would struggle to see a sillfully crafted and installed skimmer on an average ATM.

Why are we still so reliant on this kind of security? Sure, it is technically two-factor, with the card that I have and the PIN that I know, but as my previous statements show very clearly, this security can be bypassed very easily.

The Royal Bank of Scotland (RBS) quietly announced a new feature last year to their mobile app that allows cash to be removed from an RBS or NatWest cashpoint without a card. Given there has been much research on the fact that people were no more likely to forget their wallets and purses than their phones, and actually become more distressed at not having their phone over their wallet, the bank could see a shift in how people were becoming increasingly reliant on their smartphones.

The process is straightforward; after logging into the (already downloaded) app, and pressing  “Get Cash” one simply types in the amount of money they would like to withdraw, and is then presented with a six digit, one time use PIN. This PIN can also be texted or sent to someone else if need be. (VERY useful to help out friends and family in distress.) One then uses an RBS or NatWest cashpoint (unfortunately other banks do not participate in this scheme) , presses enter on the keypad, and then enters the six digit PIN number twice followed by the amount of money that was originally requested. The cash is then dispensed. If more money is required, the process is repeated and another, different, six digit PIN is issued.

To my mind this is an excellent innovation, and other thought so too, with the creators behind the enhancement, SapientNitro being awarded a Cannes Lion at last years show. A slightly cheesy advert follows…

(Note: at this point it is worth me declaring my interest, as I am an employee of Sapient, the parent company of SapientNitro. That said, I was using the service before I realised it was Sapient that came up with the idea in the first place!)

This works in many ways:

1. 1: The pin is only used once, so it doesn’t matter if a skimmer is in place, it is recording only a one time password.
2. 2: Your card cannot be cloned as it is never used.
3. 3: It is convenient because nights out only involve looking after your phone, not you phone and cash card and cash!
4. 4: Even if you phone is lost, it is password protected, tracked, and you r banking app is also PIN protected with more than a four digit pin code (it is, right?). You can also wipe your smartphone remotely in most cases.

A UK food chain, Pizza Express, did a similar thing last year as well, whereby on the bottom of the receipt is a unique code that allows people to pay with PayPal; again this is smart (your misgivings about PayPal aside) as your card cannot be taken around the back and cloned without your knowledge, as the payment is sent directly from PayPal to the restaurant and notification received on the till. Of course every time I have tried to use it the code has always been misprinted stopping me from doing so! Lovely idea nonetheless…

So what is the upshot of this? Most importantly I think it shows how with the judicial use of technology we can keep one step ahead of the criminals. Of course they will catch up, and of course there are other security implications (a rise in smartphone theft perhaps?) but RBS has shown that a relatively small change in their systems can result in a huge change in the security of their transactions. As of writing I am not aware of any other UK bank having this capability (they seem to be focussing on the ability to send payments to friends rather like PayPal than anything else), but this kind of approach should become the new norm.

It is this application of security alongside the ability to truly understand their clients and their needs that in this case has allowed RBS to steal a march on their competitors. I know this simply because of the looks on the faces of my friends when I take cash out of the cashpoint without using my card; it is magic, and they like it…

This is truly a case over security versus convenience… but with added convenience.