Eye-scanning ATM is here

Will ATM machines soon be able to identify you by your eyes?

Citigroup, Inc. is testing new technology with automated-teller-machine maker Diebold, Inc. that would allow customers to withdraw money with an eyeball scan or a code on a smartphone instead of a card swipe.

The new technology, set to be announced by Diebold on Monday, is the latest foray by big banks to find easier, more secure ways for consumers to access their cash than the ATM card, a staple in consumers' wallets for decades.

While the new bank wrinkle is years from reaching mass consumers at Citigroup, other big banks including J.P. Morgan Chase & Co. and Bank of America Corp, recently started internally testing their own cardless ATM technologies.

Citigroup's experiment involves a new kind of cash machine that lacks a screen or touchpad. Instead, customers would first check the bank's mobile app on their smartphone or tablet ahead of time to sign in and select how much money they want to withdraw. Then, they would approach the machine, which would quickly scan their iris to verify their identity. The machine, which connects to the mobile app, would spit out the right amount of cash.

J.P. Morgan showed off a cardless ATM during its investor day earlier this year but hasn't yet offered consumers a demonstration. A bank spokeswoman said that is also evaluating the use of voice- and facial-recognition technology. A Bank of America spokeswoman said the bank has tested cardless ATMs internally and will begin a customer pilot of them during the first half of next year. Similar features have already been rolled out at the ATMs of smaller banks, such as BMO Harris Bank, a Chicago-based unit of Canada's Bank of Montreal, and Rosemont, Ill.-based Wintrust Financial Corp.

Now, interest from some of the largest US banks signals that more consumers may see the option. "Larger players sometimes like to wait on the sidelines a little longer to see if a product has merit before investing in it," said Daniel Van Dyke, an analyst at Javelin Strategy & Research.

"Everyone is doing more and more on their mobile device," said Wayne Malone, Citigroup's head of global ATMs, in an interview. Between 2013 and 2015, the share of bank customers who said their first preference for basic banking was using their mobile phone rose to 13% from 5%, according to Javelin.

It remains to be seen whether consumers who are generally suspicious of large financial institutions would be comfortable letting a bank scan their eyeballs regularly.

Changing thousands of ATMs' hardware to make use of some of these features would probably be expensive and time-consuming. That means it would likely be tested extensively before any full rollout.

Proponents say the new technologies may give banks a weapon in the fight against frauds that target ATM transactions. Credit-scoring and analytics firm FICO said in May that the number of attacks on consumers' debit cards used at ATMs in roughly the first three months of the year hit the highest level in at least 20 years.

The new technology, by contrast, wouldn't need a card, which means a card's information couldn't be skimmed by machines that are attached to ATMs. The new machines also don't have PIN pads that thieves have spied on using tiny cameras.

BMO Harris currently has more than 900 ATMs running the software that allows cash withdrawals without bank cards, said Doug Peacock, the bank's lead executive for mobile banking. Mr. Peacock declined to give the number of customers using the cardless option but said it was increasing by a double-digit annualized basis each month and that growth has so far exceeded its goals.

Cardless transactions take about 15 seconds to complete compared with around 45 seconds for more traditional transactions, Mr. Peacock added.