Why Cross River Bank and Mastercard are collaborating on cardless ATM access

Thanks to a partnership between a bank and a card issuer, consumers can now receive cash at ATMs — even if they don't have a bank account or debit card. Cross River Bank, the bank of fintech startups, is working with Mastercard to give consumers cardless access to ATMs through an offering called Mastercard Cash Pick-Up. It allows businesses or individuals to send cash payments by logging in to the Cash Pick-Up platform via their bank’s website or mobile app and entering the necessary transaction and recipient. When they’ve done that, recipients receive a text message with the order number, PIN and a link that helps them locate a participating ATM nearby. The offering highlights the role of mobile phones in banking’s new normal — mobile is more than just a channel, it’s the thing that’s guiding both financial incumbents and consumers alike through  the shift from physical to digital banking, which still hasn't been fully realized. In New York, Citi is testing the ability for customers to open ATM vestibules with their phones; Bank of America and JPMorgan Chase customers can retrieve cash from ATMs using codes generated on their phones. These are just the earliest examples. "The key to business-to-consumer payments is the information you have about the person you are paying,” said Ben Isaacson, the bank’s svp and general manager for payments. “If the person gives their bank account number, you can send an ACH. If they don't, you can’t… Today we offer payment services based on bank account numbers and debit card numbers. Now, with Cash Pick-Up, we can also offer payment services based on the mobile phone number.” For now, Mastercard Cash Pick-Up is only available at enabled ATMs in the U.S., where the postal service plays far too big a role in payments, particularly low dollar disbursements, Isaacson said. When businesses send customers rebates or refund, for example, they often have to do so by mail, sending checks or prepaid cards to physical addresses if the customer doesn't have a bank account number or debit card number. It's expensive and cumbersome for businesses and inconvenient for consumers, Isaacson said. The offering will help merchant banks and ATM operators grow revenue through new transactions volumes. Cross River Bank is a big fintech player that operates backstage for the most part. It counts Affirm, Marlette and Rocket Loans as customers. It has also developed payments solutions for TransferWise and the bitcoin wallet Coinbase, as well as Google Wallet and Stripe in the past. For card issuing banks, the offering is an opportunity to increase their footprint with corporate customers, better serve their own cardholders and indirectly serve underbanked consumers without pushing its own products on them. It also reinforces the value for banks of having a physical presence, whether it's a branch or an ATM machine, as an important point of contact for banks and their customers. Despite the slow but certain growth of mobile payments, most of the world still operates in cash and 20 percent of U.S. consumers are excluded from the formal financial system. “The challenge — and opportunity — is to make that customer connection across the channels,” Jose Resendiz, general manager for global financial services at ATM producer NCR, told Tearsheet earlier this year. “Cash will still be around quite a while, people will still be able to go to physical channels, but more and more, people continue to adopt digital payment methods and experiences.”