FitPay Aims to Eliminate Effort from Wearable Payments

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FitPay Inc., a wearable technology provider, is betting that the only way to change consumer behavior is to eliminate consumer behavior.

Its software is designed to work through a payment-capable bracelet, but it doesn't work like other bracelets and smartwatches that require users to hold a wrist up to a payment reader. FitPay's approach is more like the system predicted in the science fiction film Minority Report, where customers are identified automatically as soon as they enter a store.

The bracelet authenticates users through electrocardiography (ECG) or the electrical activity of the heart and communicates with the merchant using Bluetooth Low Energy. FitPay will initially support Bioynm's Nymi band, which is also being used by MasterCard and RBC.

Other prominent mobile payment providers, including Apple Pay, haven't fundamentally changed the user experience even as they shift consumers away from cards, said Mike Orlando, co-founder and CEO of FitPay.

"The consumer is still interacting with the terminal and the phone and forcing the consumer to do something," Orlando said. "The change that will create adoption is … an experience where it's completely touchless."

The bracelet communicates with Bluetooth beacons in each store. These beacons can determine when shoppers enter a store and when they approach the point of sale.

When it's time to pay, the merchant rings up the items for the customer and FitPay pushes the transaction through. Consumers can see the total on the merchant terminal and they also receive a notification on their mobile device that they've paid.

While consumers don't want to go through a bunch of steps to transact, FitPay's system could make some nervous. If a merchant for instance accidentally rings up an item twice or rings up an item that the customer doesn't want there isn’t a way to stop the transaction right at the point of sale. Instead disputes are dealt with on the back end by FitPay.

True to its name, FitPay is also focusing on the health and fitness data that can be gleaned from wearables. The company is building a rewards platform and sees a future where merchants and brands pay to access this data and push offers to consumers. For example, Jamba Juice might want to reward consumers with a free smoothie if they walk 10,000 steps a day, said Orlando.

FitPay charges the merchant a per-transaction fee, and the consumer-facing mobile app that ties into the wearable could be monetized in the future as well.

FitPay plans on launching its wearable sysytem in May 2015. The company is currently beta testing the product with several merchants and banks but wouldn't disclose their names.

FitPay expects its merchant and banking partners to help promote and distribute its wristbands. The company also plans to tie into some of the open fitness platforms, such as MapMyFitness (owned by Under Armour) and MyFitnessPal.

Wearables are getting a significant amount of attention as the end of 2014 nears. PNC is readying its tech to deploy on wearables. PayPal is continuing its wearable wallet push by supporting the Pebble smartwatch.

Disney reports sharp adoption of its payment-capable MagicBands, which also work as hotel keys and theme park tickets. And the upcoming Apple Watch will support Apple Pay.

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