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In a market seemingly dominated by "Pays" from smartphone makers, a few companies are taking a much different approach to mobile payments. Here are some of the more extreme examples.
The Fitbit Inc. Blaze fitness tracker is displayed during an event at the 2016 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S., on Tuesday, Jan. 5, 2016. CES is expected to bring a range of announcements from major names in tech showcasing new developments in virtual reality, self-driving cars, drones, wearables, and the Internet of Things. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
Fitbit Pay may seem a bit backwards; unlike wallets such as Apple Pay and Android Pay, which began on smartphones and extended themselves to smartwatches, Fitbit Pay is meant to be used primarily through the new Fitbit Ionic smartwatch.
Payments have rarely been a selling point of wearable devices. Google's Android Wear platform does not require NFC, and the Apple Watch's support of Apple Pay may be more a quirk of timing than of strategy, since the watch launched less than a year after Apple's mobile wallet.
In the smartwatch market, consumers may not expect a wearable device to support payments any more than they expect their kitchen appliances to. And yet, the card brands are more active than ever in embedding their technology into a dizzying number of internet-connected devices.
For Mastercard, Fitbit Ionic is a chance to provide another alternative to match payments with another activity.
"This is the coming to life moment for our commerce for every device program," said Sherri Haymond, executive vice president of digital partnerships for Mastercard. "We have worked to have our tokenization services initially available on smartphones for Apple Pay, Samsung Pay and Android Pay, and then we started talking about expanding the utility of [tokenization] to service different devices."
AMC Entertainment Inc. signage is displayed outside the company's movie theater in West Chester, Ohio, U.S., on Saturday, July 30, 2016. AMC Entertainment is scheduled to release earnings figures on August 1. Photographer: Luke Sharrett/Bloomberg
MoviePass wants to be a mobile wallet, but its livelihood hinges on its use as a debit card.
By leaning on a Mastercard debit card, MoviePass is able to force theaters into accepting tickets purchased on a $9.95 monthly subscription model that at least one major chain would not have agreed to if it had the choice.
Under the card networks’ Honor All Cards policies, theaters must continue business as usual with Mastercard or risk a fight, putting Mastercard into the unwitting role of enabling a major upset in the movie theater business. AMC Theaters, the largest U.S. theater operator, is seeking a way to opt out of accepting MoviePass, which works in 91% of U.S. theaters.
“They can’t kick MoviePass out of AMC’s theaters because they’d have to stop taking Mastercard debit, and theaters don’t want to do that to their customers,” said Ted Farnsworth, CEO of New York-based Helios and Matheson Analytics Inc. (HMNY), which paid $27 million to take a 51% stake in MoviePass in August.
MoviePass, launched in 2011, has long relied on Mastercard as the funding mechanism for its app out of convenience, though it’s a clunky process. Users who sign up for the app receive a plastic Mastercard debit card in the mail, which they load with value from a credit card and offer for payment at participating theaters.
When users select a movie and “check in,” their MoviePass ticket is enabled for 30 minutes on the card, which can be used only for MoviePass purchases. About 6% of U.S. theaters also support an electronic ticketing option within the app.
People pose for a photo with the Universal Studios globe at the entrance to the theme park in Orlando, Florida, Monday, August 30, 2004. Photographer: Matt Stroshane/Bloomberg News.
Matt Stroshane/Bloomberg News
Build a theme park around it
Universal Resort's launch of the TapuTapu band at its new Volcano Bay water park illustrates how much more a wearable can do when it is incorporated into the design of the park from the get-go.
The park has been designed to accept TapuTapu wristband payments for admittance, food and souvenirs, but also to participate in the "virtual line" service, in which patrons can reserve a spot in line at a particular ride and the band will vibrate when it is time for their turn.
Hersheypark was one of the first theme parks to test contactless payment wristbands in 2012, but dropped its use a year later when reporting that the "Easy Pay" program was not resonating with park visitors.
Hersheypark's failing might have been that its band was not fully integrated into the park experience; it was little more than a wearable prepaid card. Walt Disney Co. launched its more ambitious "Magic Bands" around the same time Hersheypark was ditching its technology, but expanded the use case to enable the bands to unlock hotel room doors and provide theme park admittance. Disney also turned its bands into a souvenir; it lets patrons keep the bands after they leave, and customize them with buttons depicting Disney characters and attractions.
Like Universal's TapuTapu, Disney also allows Magic Band users to skip long lines through the Disney FastPass+ system.
But while Disney's wearable still resembles a simple bracelet, Universal's TapuTapu has the look and feel of a smartwatch, giving visitors notifications and alerts related to happenings in the park, deals at restaurants, and alerts about the patron's place in a virtual line.
The wearable that you take off
With its WaveShades, Visa has developed a wearable payment device the consumer must take off to use.
In a partnership with sunglasses manufacturer Local Supply and wearable fintech provider Inamo, Visa's WaveShades initiate contactless payments through a chip in the arm of the glasses. In choosing Inamo as a partner, Visa will operate WaveShades on the same payment platform that the Australian company developed last year called Inamo Curl, a waterproof wearable band designed for beach lovers and surfers.
Oberthur Technologies is providing the tech behind the contactless sunglasses, while Heritage Bank will serve as the authorized deposit-taking institution in Australia.
Visa is banking on WaveShades to fit more easily into the mainstream than Google's far more high tech project.
From about late 2013 to early 2015, Google experimented with payment options for Google Glass, its eyewear accessory designed for various tasks from accepting messages to omnichannel services and, ultimately, contactless or voice-enabled payments.
When first unveiled, Google sold Google Glass only to early adopters, some of which worked at mobile payments or loyalty service providers like LevelUp.
Even as some companies continued to show an interest in the high-tech wearable, Google finally pulled the plug on its experiment and quit selling the Google Glass in early 2015. Critics considered the device too expensive and too geeky to be a mainstream success.
A Swedish startup called BioHax International is offering implantable payment chips for more than half of the staff at a Wisconsin-based tech company, Three Square Market (32M). The company announced that of the 80 employees at its River Falls headquarters, more than 50 have volunteered to get implants that enable RFID transactions around the office.
While this is as much a publicity stunt as it is a pilot, it raises the question of whether it's finally time for implantable payment devices to come to market.
The Internet of Things has been eroding privacy concerns for years. Amazon has convinced 16% of U.S. consumers to put an always-listening Echo device in their homes, and this week's revelation that iRobot's Roomba could be selling copies of our floor layouts is fast fading from recent memory.
Chip implants aren't even that unfamiliar to anyone who owns a cat or dog. It’s not rocket science. But, for some reason, it crosses a line with the idea of the same technology being implanted in humans, thus distilling our identities to a single identifying chip.
But is it really any different from Apple’s Touch ID, which has convinced countless iPhone and iPad users to scan their biometric traits to make it easier to unlock their mobile devices? Dystopian paranoia is often shortsighted; sell people a practical use case and it’s a winner.
A collection of bitcoin tokens sit in this arranged photograph in London, U.K., on Wednesday, Jan. 4, 2017. The electronic coin that trades and is regulated like oil and gold surged 79 percent since the start of 2016 to $778, its highest level since early 2014. Photographer: Chris Ratcliffe/Bloomberg
Bitcart combines the Dash virtual currency — which is similar to bitcoin and allows instant and private peer-to-peer transactions — with Festy, a QR code and NFC powered wristband. Festy is linked to a user's Dash account, and merchants can execute payments in near-real time, cashing out to a desired fiat currency later.
"Virtual currency is not useful unless you can provide a way for people to spend it on something," said Graham de Barra, CEO of Bitcart, a Dublin-based discount gift card platform.
Festy is getting an early test at a bar in Dublin and a rooftop bar at a local technology incubator. Attendees received a band they can top up via a Dash account.
There are a lot of companies developing ways to place payment capabilities inside wearable devices. But consumer adoption of wearable payments is still at the early stage, if not still experimental. The clearest successes are in places where the environment is built entirely around the wearable, such as in Disney World theme parks and hotels.
In that regard, Bitcart has an uphill climb. Not only must it convince consumers and merchants to use a wearable device instead of cash, cards or mobile wallets; it must also convince them to use the Dash currency as part of the process. Neither are new innovations, but neither is widely used at this point.
"This seems to be a mashup of two concepts that have yet to gain traction," said Thad Peterson, a senior analyst at Aite Group. "And the bracelet can only be used at merchants that have chosen to incorporate the offering in their point of sale platform. It makes the challenge of achieving critical mass twice as difficult."
Stripe’s technology, which enables millions of merchants to easily accept payments online, also provides a window into the broader money-management pain points of the businesses it serves — and it is through this window that Stripe sees a path for growth.
The Accredited Standards Committee X9 is forming a group to study faster and real-time payments activity in the financial industry and eventually recommend new X9 standards and upgrades that would enhance interoperability and adoption.
Less than two months after launching a software-based model to replace traditional point of sale terminals, MagicCube has received a security compliance allowance from Visa for the mobile-driven system.