On the Clock

Wearables Are Getting in the Money

Payments_Nymi_lThe introduction of Apple Pay in early September highlighted the potential role of wearables in mobile finance. The ability to use a smartwatch for payments might be just a marginal added convenience, but the market is about taking small, marginal, evolutionary steps forward. From cash to card to phone to watch, the electronic wallet is becoming an extra limb: a natural extension of the user.

An interesting array of financial apps for wearables and biometric payment bands have been launched in the past few months (even in the past few days). For some early users, what they wear is how they pay. There’s a limited track record to go on – indeed, there have been some early failures – but money-related services could become a key selling point for wearables.

At the Money 20/20 event this week, start-up Bionym showed off its Nymi payment wristband. The device resembles an activity tracker, and uses NFC for contactless payment and biometrics for user verification. The wristband contains a small electrocardiogram (ECG) reader that rests against the skin. When the user requires verification for a payment or a login, they can touch the top of the band to perform an ECG reading to be matched against metrics on record. According to the company, this biometric is unique. Bionym intends to replace cards, PINs and passwords with the band — no phone is needed. The company says it’s currently working with banks and MasterCard to trial the device.

Barclays recently introduced a similar NFC-enabled payments band, called bPay. The wrist-worn device allows users to top up the band with value, similar to an Oyster card, and the device can be used to make contactless payments where MasterCard or Visa cards are accepted. The future of the payment card is moving from flat plastic.

This week, Nationwide launched an Android Wear app enabling customers to check their account balances. The app isn’t feature-rich, but could be developed further to allow simple transactions if this iteration proves popular. Nationwide claims it’s the first financial services firm in the UK to provide such a facility via a wearable device, though CCS Insight has noted similar wearables trials in the UK.

Banks in other parts of the world have been even faster to adopt wearable platforms. Earlier this year, Spain’s Caixa Bank introduced an app for smartwatches and Google Glass, providing financial information on stock prices, currency rates and even directions to nearby branch offices. Westpac Banking in New Zealand and St. George Bank in Australia have developed a similar Android Wear apps. These endeavours are somewhat premature given the limited installed user base at present, but it’s a natural development of multi-device access to Internet-based banking. The concept is getting about, and is additional confirmation of the trend CCS Insight predicted more than four years ago: that apps would become a default method of interacting with services.

Financial institutions are recognising the potential of wearables as a platform for their services. It’s too early to tell if consumers will buy into the concept, but CCS insight believes that the added convenience and additional security are compelling, and that financial institutions as well as security firms will back the development of apps and products.

Money could be a killer app for wearables.