How Wearable Will Shape the Future of Mobile Payments

Mobile – Banking & Finance – A Necessity 

The adoption of mobile for the purpose of banking and finance section is no more an option to the users and stats indicate that most of the time is spend in mobile apps than in web with estimates that by 2020, around 80% users in the world would be in possession of smartphone. As per Visa, Australia has been leading the world in adopting contactless payments while Apple Pay will be hurrying over it.

Mobile now, no longer seems to be an option but a necessity and a key channel for delivery of financial services. This seems to be a good opportunity for banking and finance sector and with Apple Pay together with introduction of wearable, developments in mobile technology had given way to various opportunities for financial services businesses in redefining on how consumers could interact with banking as well as financial services. We tend to live in the age of entitled consumer where consumers expect more, trust their peers, have options, a voice, are informed and feel that they are entitled to –

• Access to their financial information whenever they intend to
• Real time and 24/7 banking services
• Real time, secure and convenient transactions
• Intuitive, simple and seamless user experiences

Wearable Technology – Important Part of Companies Game Plans

Executives from Capital One, MasterCard and PayPal participated in an animated discussion on the future of mobile payments at the Wearable World Congress in San Francisco and explained on why wearable technology is an important part of the companies’ game plans. MasterCard’s Vice President of start-up engagement and acceleration, Stephane Wyper commented that MasterCard is aimed on leveraging the latest as well as the greatest gadget which includes wearable, in creating loyal customers.

He added that looking at the future; consumers are interacting with updated devices which extend beyond plastics or the devices in their pocket. The question for MasterCard is that `how to enable all of those connected devices to be payment devices’. Wearable in the market is on the rise and Capital One is of the opinion that it could be used in drawing and retaining customers. Capital One’s Vice President, Angie Moody, of new product innovation, comments that the company is looking to wearable to `reinvent the way consumers interact with finance on daily business’.

Wearable Provide Connectivity when Mobile Apps Unable To Do So 

Capital One intends to extend the experience of payment in order to help consumers with more informed, responsible payment options by using the data that is collected by wearable which include location as well as data it collects as per Moody. It states that wearable would offer new ways in learning who you are, when you are and where you go.

Varun Krishna, of PayPal, Sr. director of its consumer wallet division envisages wearable computing as an opportunity for the company which could give rise tomore connect as well as a personal experience. He states that wearable could provide connectivity when mobile apps are unable to do and by nature they are more connected to the user than a phone.

Progress in data analytics tends to also play an important part in the evolution of wearable based or wearable assisted, mobile payment since they tend to help the financial institutes to make better use of consumer data. Presently, payment companies tend to request data regarding customers and enter information as they wish, in sharing into mobile apps or websites. Future wearable and other devices will tend to automatically collect data when users opt in, delivering relevant and contextual information which will be less of a pull and more of a push according to Moody.

Improve & Extend Process of Payment

He adds further that `wearable could improve and extend the process of payment though there could be balance between ease of use of friction removal with a need in providing all necessary information in making informed financial decisions.

One needs to balance reduction of friction with the need in making people comprehend the process where they tend to spend money without a thought. By eliminating friction one could take the customer away from the tangibility of cash’. Moody quotes the recent decision of Uber in making the customers confirm that they are willing to pay for `surge pricing’ prior to their request of a driver.

This confirmation was added since Uber had removed too much friction making it easy for individuals in requesting a ride in peak hours thereby getting stuck with high charges as per Moody. Moody is also of the opinion that a balance between ease of use as well as providing relevant information defends consumers as well as helps in building trust between them and the service providers and if one tend to break that trust, it does gets difficult to get it back.

The application ecosystem for wearable as well as mobile payments is progressing and providers will learn from their initial mistakes. Capital One is also keenly attempting in establishing itself as a player in mobile payment section through promotional offers and discounts in popular mobile apps which includes Uber.