Every time you withdraw money from an ATM, do you worry a bit about hidden cameras or card cloning devices giving criminals access to your account? What about when you hand over your card to a waiter at a restaurant to be whisked away for a few minutes? A new product launched by Bank of India in association with AGS Transact Technologies Ltd, an online payment systems provider, seeks to address these concerns. Using the QR code on Bank of India’s Unified Payments Interface (UPI) app and the ATM, you will be able to make cash withdrawals without using your debit card.

Since the QR technology is interoperable, a nod from the National Payments Corp. of India (NPCI) could make it universal and, in the future, you may be able to use any UPI app (read Google Pay and other UPI apps by banks) to make withdrawals from any bank’s ATM.

How it works

At present, you need to be a Bank of India customer to use this feature, which is available at some of the bank’s ATMs in Mumbai (the full roll-out is planned in three to six months). You need to download the bank’s UPI app. Next, select the QR cash feature on the Bank of India ATM screen. Then, select the amount to be withdrawn and scan the QR code generated on the ATM screen using the “scan and pay" feature of the UPI app.

In order to do this, you only need to know two PINs—the one to open the bank’s UPI app and the PIN for UPI transfers. A one-time password (OTP) is not required. “This solution provides the next level of security for ATM transaction as there is no requirement of card and PIN," said G. Padmanabhan, chairman, Bank of India.

QR technology appears more secure than making a debit card withdrawal, but what if you lose your phone? This will not necessarily lead to fraud because your PIN numbers are still required to use this facility. In addition, the bank has capped withdrawals at 2,000 per transaction for now. The terms for the number of free withdrawals and withdrawal charges will remain the same as in the case of withdrawals through debit cards.

“For banks planning to deploy this on their ATM network, there is no major investment required as it is possible to offer the service by making a small upgrade to the existing software in ATMs," said Ravi Goyal, chairman and managing director, AGS Transact Technologies.

Some other banks also offer cardless withdrawals from ATMs. For instance, you can use the SBI Yono app to set a cash withdrawal PIN. This PIN and an OTP will allow you to make cardless withdrawal from select SBI ATMs. India Post Payments Bank (IPPB) also uses QR technology, but in a different way. The IPPB issues plastic cards that dispense with the need for PIN using QR code. They also need an additional layer of biometric verification. You can read more about them here: bit.ly/2M0yjmA.

Mint take

If the system does become universal, it will be a step up from the current use of plastic cards which can be cloned and are also environment-unfriendly.

However, one major flaw in the system is its dependency on the internet. Network coverage, particularly in rural areas, is poor.

If you are a Bank of India customer, try it out but don’t cut and throw away your debit card yet.