Are wearable payment devices fashion or tech? Or is it a case that adorning yourself with a piece of technology is a fashion statement in its own right? Whatever your view, there’s no denying that wearables are one of the hottest trends of 2023.
To find out more about this fast-moving corner of the fintech world, we gathered together three industry experts for Let’s get physical: wearable tech enabling new payment innovation, a special API Chronicles livestream covering everything from rings to bracelets – and even implantable payment devices.
Hosted by Liz Lumley, deputy editor of The Banker, the panel featured Terrie Smith, co-founder and global ambassador for London-based Digiseq, Mattias Eld, CEO and co-founder of Fidesmo, and Tapster’s co-founder and chief executive Tobias Ericsson.
Route to market: how wearable technology is evolving
In time honoured style, the panellists began by describing their own innovation journeys. Terrie, who proudly displayed an array of payment devices she wears everyday, explained how she had first encountered wearable technology in 2006 while working with Mastercard.
“We were designing wearables as companion devices. It didn’t really take off because there were lots of barriers at the time, but it did provide the basis for what we’re doing today. So, I initiated Digiseq in 2014 to take wearables beyond payments to become fashion items as well,” she explained.
Similarly, Sweden-based Tobias came to wearable payment devices via an indirect route. “Before I started Tapster, I co-founded a company called Triwa which makes watches. We could see that Apple was going to launch its first watch so we started thinking about how to integrate smartness into an analogue watch. By coincidence, there was a fintech startup just 500 metres from us looking for a complementary partner.”
That partner was Fidesmo, which Mattias co-founded following a career with Ericsson working on chip technology used in SIM cards.
By connecting Fidesmo’s underlying tech expertise with Tapster’s attractive wearable hardware, Tobias was able to integrate watches and rings with the payments ecosystem – and turn his vision into a rapidly evolving reality.
“We started out thinking about watches but it’s rings that have been the game changer. The ease of paying with a payment ring is unbeatable,” he said.
Yet despite the obvious advantages, there is some way to go before wearable payment devices become mainstream. This point was reinforced by both Tobias and Terrie, who explained that shop assistants often respond incredulously when presented with a bracelet or a ring at the checkout. “They think it’s magic,” Tobias claimed.
Ringing endorsement: how banks and consumers can drive adoption
Banks, the panel felt, were key to boosting adoption rates. “Here in the Nordics we have several banks that really understand the importance of moving away from plastic cards towards wearables. The wearable device enables banks to be at the top of the customer’s wallet but it also helps us to distribute wearable devices towards various target groups,” Tobias explained.
Terrie added that wearable adoption should be a relatively easy thing for banks to do in the UK. “Banks don’t necessarily have to do anything, they don’t have to change their way of business – it’s just offering the ability for companies like ours to provide the service on a wearable to their consumer. They just have to buy in,” she said.
While there were some differing views on the optimum scope of involvement of banks in the distribution and marketing of wearables, the panel was unanimous that external tech innovators were best placed to build the products that bank customers could use.
“If you look back a few years, the banks had this strategy of wanting to take control and maybe even design the wearables themselves. Wisely, they’ve taken a step back and are now letting the professionals handle that aspect,” Mattias commented.
Aside from financial institutions, another way consumers are being introduced to wearable technology is via events and sports venues. According to Terrie this proved incredibly effective for a Spanish football club client.
“The wearable device enabled payments for drinks both within the stadium and outside. It also enabled access to the stadium and allowed fans to vote for man of the match. As a result, people became more familiar with wearables. I also think this demonstrates how wearables are a fashion item,” she said.
However, the question over whether wearable devices were fashion accessories revealed some clear and thought-provoking fault lines between the panellists.
Mattias said that an increasing number of people were “getting used to having techie products on their bodies” and this was becoming a fashion. However, Terrie countered that “women felt slightly differently”. “What we adorn our bodies with, it’s very important to be within a fashion environment not just a tech environment,” she said.
Implanted tech: when payments literally get under your skin
The conversation wrapped up with a discussion on the ethical and practical considerations of implanted payment devices, with Liz asking the panel to ponder whether they might be a dystopian step too far.
“Technically it’s possible but there are still issues with antenna size, which means a scalpel is required. I think implants will take off when they can be inserted with a piercing machine or something like that,” Mattias said.
But Terrie cautioned that regulation needed to catch up before such technology could be rolled out: “At the moment there’s absolutely zero regulation on how it’s done, who does it and what happens if it all goes wrong. I’m not saying I disagree with it but regulation has to catch up a little to protect the consumer,” she said.
The panel ended with some wise advice from Tobias on embedding payments technology on the person.
“It needs to be easy to use, so it needs to be close to your hands or wrist. And that is why we’ll continue to develop rings and bracelets, as these are what are driving sales at the moment,” he concluded.
Marqeta’s Let’s get physical: wearable tech enabling new payment innovation API Chronicles livestream can be heard in full here.
Do you use a wearable payment device? Are you a wearables innovator? If so, we’d love to hear your thoughts on this content. Email us at europe@marqeta.com
