A brief history of wearable tech
Wearable technology isn’t new. According to a Guardian report on the 10 most influential wearable devices, their history dates back to the 17 th century. It all started with the invention of the abacus ring and the first pedometer, originally envisioned by Leonardo da Vinci. According to IDC (International Data Corporation) insights, the market for wearable technology reached an all-time high in the fourth quarter of 2016 with overall growth of 25% across the year.
So what about wearable payment devices? It looks like payments technology, or PayTech, just hasn’t kept up with these advances. But things are changing – and the term ‘wearable payment technology’ may soon not be big enough to describe it.
Advances in wearable technology
There are a number of examples of wearable paytech such as bracelets and key chains developed by companies such as NFC and the stylish rings launched in spring this year by Kerv Wearables. Founder of Kerv Wearables, Philip Campbell, said, “Our aim was to develop a desirable wearable item, that does not obviously look like a piece of technology.” Using RFID (Radio Frequency Identification) and NFC (Near Field Communication) technology, wearable items have been cited by industry leaders like Barclaycard’s Chief Executive, Amer Sajed, in an interview with the BBC last year as the precursor to the elimination of physical plastic payment cards.
Payment by ‘thing’
New forms of payment technology are emerging that take everyday things and turn them into payment devices. Take for example this week’s Lucozade promotion at Oxford Circus station. Five thousand contactless PayTech bottles (pictured) are being handed out free to commuters. Each bottle base features contactless payment technology loaded with a credit for a free ride on London Underground.
A team of pioneering fintechs who have collaborated with Lucozade powers the ‘paytech bottle’ technology. They include our client Global Processing Services (GPS) together with MIR Limited and muchbetter.com.
Clearly the ‘paytech bottle’ extends past wearables payment technology. The term is likely to become redundant or a niche within something bigger. So what should we call it? GPS believes using paytech to turn everyday items into payment devices is a similar principle to the ‘Internet of Things’. So practically we are entering the age of ‘The PayTech of Things’.
Challenges for the evolution of contactless payments
Although consumer adoption of contactless technology continues to grow, it does face certain challenges. The rise of contactless fraud will harm both consumer and merchant confidence in the technology. Also, contactless payments are currently subject to a £30.00 limit that is likely to constrain use. However, according to an article in The Telegraph earlier this month, Apple is set to challenge this using the latest finger print scanners and biometrics technology to securely remove the need for such a limit.
We believe these challenges will be overcome and wearable technology will continue to develop and evolve into ‘The Paytech of Things’. This opens up an exciting new era of payment innovation and consumer convenience. Watch out for our upcoming blog showcasing our experiences using the Kerv Wearables contactless ring. It illustrates the low level of general awareness of paytech advancements and demonstrates the need to build awareness and confidence amongst consumers and merchants. Only then will the The PayTech of Things be free to fully emerge.