6 'villages' built around mobile payments

Mobile wallets have always had a chicken-and-egg problem: Why should merchants accept them if consumers don't use them, and why should consumers use them if merchants don't accept them?

To solve this problem, it takes a village. Whether it's the Chase Pay Village pop-up in New York or the Olympic Village in other parts of the world, these self-contained communities have the ability to mandate a specific payment type is accepted. But it's still up to consumers to decide whether to open up their wallets (digital or otherwise).

To bring consumers and merchants into the Chase Pay ecosystem, the bank is taking over New York's Oculus shopping center and transit hub through Jan. 7, 2018.

The 20 participating merchants accept Chase Pay at their pop-up shops, with some offering freebies and discounts to Chase Pay users (they also accept standard payment cards). Chase has its own kiosk in the middle of what it calls the Chase Pay Village, offering advice (and a free tote bag) to new Chase Pay users.

The shops also serve as a showcase of the technology Chase has invested in over the years. The QR code readers are the same ones LevelUp provides to its merchants; LevelUp received a $10 million investment from Chase in late 2016. Chase Pay itself is built upon ChaseNet, a closed-loop network that stems from a 2013 collaboration with Visa.

Long before Apple adopted the term Face ID to promote its latest iPhones, PayPal was experimenting with a similar (but comparatively low-tech) concept for a mobile wallet. It used the 2012 Telluride Film Festival in New York as a testing ground.

Unfortunately for PayPal and its partner ShopKeep, most festival goers weren't impressed.

PayPal's system allowed users to "check in" via a mobile app, which transmitted a photo of the user to merchants using ShopKeep's system at 20 registers in seven locations at the festival. When completing a purchase, the seller would look at the photo to verify the shopper's identity.

The companies expected thousands of transactions during the festival, which ran from Aug. 31 to Sept. 3 of that year. The actual results fell short.

ShopKeep noted that the people who did use PayPal's wallet used it multiple times, and that cashiers enjoyed the process as well.

In a partnership with sunglasses manufacturer Local Supply and wearable fintech provider Inamo, Visa provided payment-capable sunglasses for the St. Jerome's Laneway Festival music events in Australia this year.

Visa's WaveShades initiate contactless payments through a chip in the arm of the glasses. In choosing Inamo as a partner, Visa operated 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 provided the tech behind the contactless sunglasses, while Heritage Bank served 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.

At the Laneway Festival in Australia, Visa and Inamo promoted the WaveShades sunglasses as something easier to keep track of in a party atmosphere, rather than being "weighed down with cash while dancing the day away," Visa said in a press release.

The WaveShades sunglasses were not sold to the general public ahead of time.

Visa has had a major sponsorship role at past summer Olympics, using the setting to test new technology. This type of "global lab experiment" lets the card brand view the four years between this major athletic event as a gauge for payments advancements.

Visa will use the upcoming Winter Olympics in PyeongChang, South Korea, to push wearable technology. Visa and Lotte Department Store, a South Korean retail chain, are selling gloves with embedded Near Field Communication chips and stickers to power contactless payments. The gloves contain a dual interface chip and a contactless antenna that can make payments at about 1,000 Olympic venues and contactless readers in other markets.

In London in 2012, Visa equipped its sponsored athletes and guests with mobile phones and payWave software to test the early days of contactless payments.

In Brazil last year, Visa athletes and guests wore an NFC Ring with a tokenized general purpose reloadable Visa prepaid card, its first venture with a ring carrying payments capabilities.

The impetus for Visa to introduce an NFC Ring in the Rio Olympic Games was that year's Super Bowl, where the card brand provided its guests with a chip-enabled wristband for payments and personal identification.

After that experiment with payments wearables, Visa had more time to contemplate how to move away from payments wristbands and into a chip-enabled ring.

NFC Ring, with offices in London and Boulder Creek, Calif., had not previously embedded a payment chip in its product. Previously, NFC Ring was promoting its product as a way for consumers to unlock doors or mobile phones, or transfer information to other people.

Festivals and flea markets may seem like villages unto themselves, but after a weekend they usually disappear. Part of Disney's magic is keeping such environments running year-round — with their own unique payment systems built in.

Back in 2013, Walt Disney World resorts began offering Magic Bands, an evolution of the theme parks' Key to the World contactless cards. These bands functioned as payment instruments, admission tickets, hotel keys and souvenirs. By mid-2014, half of Disney World guests opted to use the bands — including ones who weren't staying on Disney property and thus couldn't use the bands' full range of features.

Ninety percent of MagicBand users rated the experience as excellent to very good, the company said.

The wristbands use a digital token to identify the wearer and do not store card account data. The bands also pair with a mobile app, allowing users to access the Fastpass system to skip lines at certain rides by agreeing to ride at a particular time.

The success of Disney's program is in stark contrast to similar projects such as a wristband payment system introduced in 2011 at Hersheypark. Hershey shuttered the program the following year, citing low demand.

Universal Resort's launch of the TapuTapu band at its new Volcano Bay water park illustrated how much more a wearable can do when it is incorporated into the design of the park from the get-go.

Volcano Bay opened it doors to the public in Orlando, Fla., on May 25, 2017, and was designed to accept TapuTapu wristband payments for admittance, food and souvenirs, but also to manage 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.

Visitors entering the park receive the TapuTapu when they arrive, and guests can enter a credit card and PIN to use it to pay for everything inside the water park. It also allows users to set up spending limits, and monitor them, for each member of the visiting party.

Mostly, the premise behind the TapuTapu is to encourage spending at a venue where park goers are likely to leave their wallets and cash in the dry safety of a locker.

There are obvious similarities between the TapuTapu band and Disney's Magic Band, but TapuTapu was designed to be more interactive.

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. And, much like the Disney Magic Bands, the TapuTapu operates as the key for opening and locking hotel room doors; it also works for lockers.

But it's not a souvenir. Visitors must return the TapuTapu band when leaving the park.