Wearables aren’t just for showing smartphone notifications and tracking your fitness (or lack of it!) anymore. A growing number of them are adding contactless payments to the mix. Enabling you to save time and stop fumbling in your wallet for the right bank card, contactless payments are quickly gaining pace. The technology is tested and easy to implement, and that means we’re seeing it appear in all sorts of places.
Contactless is hot right now but what will wearable payment interactions look like by 2020? Visa Europe posed this question recently to graduate students from Central Saint Martins, challenging the University’s top design students to deliver prototypes on wearable payment devices that would appeal to the emotional, useful, and social technology aspects of today’s high-tech, mobile-paying consumer.
The students worked with CSM’s Programme Director for Product, Ceramic and Industrial Design, Nick Rhodes, to bring their concepts to life – and in the process, identifying values, in Rhodes’s words, that show “a very strong conceptual, sociological link between the body, identity, security, payment and value.”
Consumers want their wearables to be highly functional while appealing to their own personal style – a connection that Visa Europe sees that, with adding a payment option, translates into a more useful wearable, and one that is worn more often by the consumer.
Nick Mackie, Visa Europe’s head of contactless, explained that wearables “breed an intimacy that has never really been seen before in the banking world, it’s seldom that people feel an emotional connection to a bank card. For a lot of wearable devices adding a payment capability adds a usefulness to it,” he said. “Usefulness translates into the extent to which the device is worn. Those that don’t deliver that correct level of utility can often find themselves in sock drawers. Our view is that by 2020, it may be the case that many wearable tech devices will have some form of payment capability.”
Wearables – Best in Show
It is certain that contactless payments will be a key element in the design of wearables for tomorrow and in years to come, but what are the options that are available to consumers today?
Many big-named companies like Apple, Samsung, and Google have already put their hat into the ring, producing smartphones that offer NFC payments or payment options through apps, and have seen some traction on adoption from consumers.
Now, we are starting to see companies create new, stylish options that are combining fashion and technology, and creating a new wave of innovative payment options that make it easier (and more fun) for consumers to spend their money.
NFC Ring and Smarty Ring is developing jewelry with wireless hardware built-in, and the designs are not going unnoticed.
London’s Fashion Week provided a big moment for wearable tech, as Henry Holland’s Spring/Summer 2016 show debuted its line of fashionable smart rings. Handmade, gold-plated rings with semi-precious stone paired with the technology of the NFC Ring devices, Cashless on the Catwalk event offered VIP shoppers a first-time experience that was described as “a retailer’s dream.” The entire process of making purchases with a simple tap of the finger took impulse buying to the next level – a fashion lover’s dream as well.
“I was very clear that I didn’t want to create something that looked like wearable tech,” Holland told Wareable the day before the show. “We’re at the stage where it has its own kind of recognizable look. If you are a vain, fashion-conscious customer you wouldn’t necessarily want to wear some of the mass market pieces of wearable tech that have come out. People have been turned off by it. So this was about creating a piece of covetable, desirable jewelry and saying – by the way, that’s a credit card.”
Don’t feel like wearing a giant be-dazzled ring to make your payment at the coffee shop? Lyle and Scott (in partnership with Barclays) offers an NFC payment option built right into your jacket. That’s right, Barclay’s bPay payment bit technology is tucked into the cuff of the sleeve, allowing you to pay by jacket.
If paying by the swipe of your wrist doesn’t feel right, the Nymi Band uses the user’s unique heartbeat to prove identity of the user – adding a layer of biometric security to the device to protect users against hacking attempts.
Just a Fad?
Some researchers, like Gartner, worry that wearable technology may be all hype, while others like John Weir of the Wearable Technology Show believes there is more to wearable technology than inflated expectations.
“There’s a lot of naysayers because I think that naturally enough people suspect any new technology that has a lot of hype around it and that’s certainly true,” says Weir. “I think, if I’m being really honest, there is a failure rate with some of the smaller startups but that’s only natural. You’ve got to break a lot of eggs to make an omelet.”
If we take a look into the future, we see that the importance of wearable technology will be tied heavily to the consumer. And, the consumer that is predicted by 2017 to have more spending power than any other generation is the technology-loving millennial.
As the first generation that has never known a world without the internet, millennials have been shaped by technology, with over 85% owning a smartphone. It is a safe bet to say that wearable technology has an audience that is ready to embrace it.
Researcher IDC predicts that shipments in wearables will grow from 80 million in 2016 to over 237 units in 2020, with 30-40% of those wearables having payment functionality, compared to the 2% today.
The Future is Bright, but Requires Security
The future of wearables seems to be a bright beacon of opportunity for companies creating the devices as well as for the consumer wearing it. Adding a payment capability to a wearable device does adds to the consumer’s convenience, but it also raises security concerns.
As wearables continue to grow- offering more payment options to users – so does the potential for fraud. Symantec’s research shows that the majority of wearables are vulnerable to breaches, and even though companies are working on technology to authenticate the user, payment security will need to be a huge consideration as more and more wearables adopt a payment option within the device.
Wearable devices with a payment capability need end-to-end protection, such as Bluefin’s PCI-validated Point-to-Point Encryption (P2PE). P2PE encrypts cardholder data at the Point of Interaction – at swipe, finger tap, or dip – preventing clear-text card data from being present from a payment transaction, where it could be accessible in the event of a data breach.
With P2PE, you can use your wearable tech and know that your data is safe.