When Matt Weidler made the long walk from his desk to the automated teller machine and realized he had forgotten his ATM card yet again, he decided the best thing to do was to reinvent the ATM.

"I would walk halfway to the ATM at the branch, and what I realized is, every time I did this, every time I would leave my wallet," said Weidler, an asset analyst at Evangelical Christian Credit Union of Brea, Calif.

However, he added, "I would never lock my cell phone in my desk."

And so he set about inventing a system to use a mobile phone to authenticate an ATM transaction.

The process he designed will enable members to register their phones at a credit union branch. A member then types in that phone number at the ATM instead of swiping a card. The credit union sends a text message to the phone, and the member replies, verifying that the phone is in the proper user's possession. The member would provide further authentication by typing a PIN on the ATM's keypad. The system eliminates the need to use a card at the ATM.

For his design, Weidler won the inaugural CO-OP Think Prize in May. The $10,000 prize is awarded for a business proposal that will enhance the CO-OP Financial Services network, which works with more than 3,000 credit unions and operates 28,000 ATMs, including those ECCU uses. For ECCU to adopt Weidler's plan, it first needs CO-OP to implement it.

CO-OP is evaluating Weidler's idea, checking its own systems to make sure they are fast enough to handle mobile authentication.

"We can't predict at this time exactly when Matt's idea might be implemented for our credit unions," Kathy Herziger-Snider, CO-OP's vice president of product development, said in an email. "We are in the process of taking a second technical review of the idea to analyze feasibility."

Many proponents of mobile payments claim there are thousands of consumers like Weidler who would leave home or office without their wallet, but would never set foot outside without a mobile phone.

And many companies already use cell phones as a second factor of authentication for some interactions. JPMorgan Chase & Co. sends a code as a text message to customers registering a new computer for online access to a card account.

Shopkick Inc., the developer of a mobile-based rewards program, detects a user's presence in a retail partner's store with audio signals interpreted by a smartphone app.

Though Weidler's plan seems to fit in with that group of technology, some observers said that using a mobile phone as a second factor of authentication at the ATM may not improve the security or the experience over the current standard of using a plastic card.

Cards may actually be more secure than phones for authentication at the ATM, said Brian Riley, a research director in the bank cards practice at TowerGroup.

"It's the kind of new-development technology that kind of makes me twitch, because I'm losing another level of security that is afforded to me at an ATM," he said.

Banking customers are comfortable with the idea of swiping a card, Riley said. Many banks and payment companies have already taken a close look at using phones at the point of sale and found that consumers still prefer cards and cash for payments, he said.

ECCU is not the only company trying to encourage consumers to use a phone as a card substitute. Heavyweights like Google Inc. and Visa Inc. are developing digital wallets that use phones for payments. They are testing systems with the top banks in the U.S.

Wiedler said his idea might put his credit union and CO-OP in the same league as the companies behind those mobile wallet systems.

ECCU's mobile authentication process could eventually be paired with other mobile technology, such as a contactless payment chip built into phones.

"It's a foundation for them to sort of build an infrastructure," Wiedler said.

And for Weidler, the technology has already stared to pay off — he plans to use the $10,000 he won from CO-OP for a down payment on a house.


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