by Ivano Asaro and Valeria Portale, Mobile Payment & Commerce Observatory
Innovation runs fast also in the world of payments. Though payments made through smartphones still need to fully leverage their potential the time of wearables is now, with the availability of objects that can be worn such as watches, bracelets, or rings, that enable to pay by simply coming close to a contactless POS.
According to a report published in February by Mastercard, one European citizen out of four can’t wait to be able to pay via wearables, that is not only the smartphone but also smartwatch, fitness tracker, rings or other wearable devices.
On the 9th of August Samsung presented the brand new Samsung Galaxy Watch, strongly focused on user wellbeing and stress monitoring which, like previous models, is based on NFC technology and combined with Samsung Pay can be used as a contactless payment device. After about one month, in response to its main competitor, Apple introduced version 4 of the Apple Watch: this too, as in the previous model, includes NFC technology and is therefore capable of paying through Apple Pay.
Also recently, American Express launched Amex Band, the contactless bracelet enabling AMEX card holders to pay just by moving their wrist over the POS. On the 4th of September, in collaboration with Visa, the Moscow Credit Bank launched a payment solution that uses an NFC ring. A similar service had been tested by Barclays in the UK already in 2015.
But it is not only banks or smartphone manufacturers that are working on such solutions. Michael Kors launched Access on August 20th, a classic style watch with Google Fit to monitor physical activity, and with an NFC antenna for Google Pay payments. The exact same choice was also made by Skagen for their new smartwatch Falster 2 presented at the end of August.
Fitbit, one of the leading manufacturers of wearable devices, in recent months released two fitness trackers (Versa and Charge 3), both including NFC technology to enable payments via Fitbit Pay. The payment service is active in 18 Countries and supported by over 100 financial institutes (in Italy by Carrefour and Boon).
The 3rd of September, the famous clothing and accessory brand Diesel launched a new Google Pay enabled touchscreen smartwatch (in countries where Google Pay is available), and with Alipay in China.
A period full of new device news, to be added to products already on the market and launches, such as the Letspay contactless bracelet by Unipol in Italy of just a few months ago.
Smartphones and wearables will be increasingly integrated with payment solutions. The smartphone’s screen continues to be a key element to offer additional services other than payments (discounts, loyalty cards, saving services, identity, etc.) and, especially, perceived by users as more secure: the possibility of viewing payment information in real time attenuates users’ fears of using such tools. This is another reason why wearables are often integrated with smartphones, in order to receive notifications and check information in real time.
It is undoubtable, however, that in many circumstances it is much faster and easier to pay simply by bringing a bracelet or ring near a turnstile or a POS rather than getting out a phone from a bag or a pocket, especially when the expense is below 25 euros and does not require a PIN code or authentication. The installation of contactless POS on Milan’s underground turnstiles could prove to be an important launch pad for the adoption of these objects: it is not by chance, in fact, that in London, where contactless technology is in use on the entire underground network, such solutions have been under testing for several years now. Additionally, smart watches are increasingly associated with fitness and the concept of wellbeing, and have become the inseparable partners of many athletes. Also in these situations a bracelet or watch would greatly simplify the payment process.
Users will not give up their smartphones, but it is likely that a growing number of people will get one of these smart devices and chose which tool is best for each occasion.