Is Wearable Technology a Leap for Payments?
I have been asked some questions following the news that Wallaby has released the first native payment app for Google Glass last week. This, I thought, was something that could be really interesting but alas I ended up being disappointed. My first major issue is that it isn't really a payment app - its a retail / financial app but in this instance Wallaby for Glass does not allow you to make a payment and Glass does not become the mechanism for making that payment. Perhaps it is an interim step - it recommends which of your cards linked to the Wallaby app will give you the best return/offer/reward but the consumer still pays by card. In the future perhaps it will be possible to pay with your phone or Glass but this is not what it shows in demos yet.
However, it does show that people are interested in making more of the payment-retail user experience and integrating more technology to improve and offer more to consumers. Already there are many contactless wearable devices which are not yet smart or connected which can be used for payment at POS. And the intelligence doesn't have to be on-device, it can all be provided through the back-end systems with real-time updates on your smartphone which is something that could be added in this instance.
There are questions still to be answered if smart wearables are to become the means of payment. For example, if considering Glass, what technology will be the payment channel? NFC seems unlikely to me since I do not believe that users will want to remove them and "tap" to pay. Can it be done via Bluetooth Smart? And will retailers be willing to change their internal processes and customer flow/management to incorporate them? And that brings me to another question - will any smart wearable technology be affordable and mass market enough to have an impact on payments? If this is the case will consumers be better keeping it simple and sticking with contactless wristbands, rings or NFC phones since these are all compatible with existing POS infrastructure?
Don't get me wrong, I can see the appeal - handsfree interaction, information updates, in-door location and offers, augmented reality, etc. can all improve the retail experience for both the vendors and the buyers. It won't be to everyone's taste and it may be seen as too "big brother" or too intrusive but there are those that will want to take advantage of it.
Another aspect that cannot be ignored is security, especially in the current environment with hacks and data breaches all too common these days. Are smart wearables designed with security in mind from the off? Given they - initially at least - are not intended for payments I doubt it. New hardware and software solutions for smartphones and tablets are being developed to improve security in connected devices but it does not mean that these will carry over into smart wearables. It will be interesting to see if this news is the first of many such stories or whether this is just a case of clever marketing to pique our interest in what is a small, yet much hyped and competitive emerging product group.