As computing devices get closer to the body, Westpac New Zealand is exploring how wearables such as smartwatches and Google Glass can be used for payments and other financial services.
Westpac, which in late 2013 launched a banking app for the Sony SmartWatch, is expanding its work to other wearable devices. The smartwatch market alone is set to expand with the recent launch of Google's Android Wear platform and the rumored Apple iWatch, and the bank envisions using these devices to make contactless payments. And Walt Disney Co.'s recent success in convincing half of Walt Disney World theme park guests to use its payment-capable MagicBands indicates a clear consumer interest in wearables.
"We're in a position to do a wide range of work in innovation, including seeing how people use these new computing devices and how they may use them to make payments," said Simon Pomeroy, chief digital officer for Westpac.
Westpac is testing wearable payment systems with consumers to gauge their comfort level with the technology, and the bank also plans to test authentication techniques such as voice recognition technology or photo recognition. The plan is to see what technology provides the best chance for a seamless mix of identity verification and payments.
"We want to know what the consumers' 'pain points' are in regards to payments or other transactions, and how that can be fixed with wearables or other new technology," Pomeroy said.
To court developers, Westpac also operates an "app challenge" as a means to spot innovation early. Developer programs are becoming a popular way among payment companies to reach out to programmersPayPal, MasterCard and Microsoft have each hosted "hackathons" and other events to attract interest developers of payments and financial services apps.
Westpac is also working with Samsung, which has released several iterations of its Gear smartwatch over the past year, to get early access to new technologythe bank's agreement with Samsung covers smartphones, tablets, watches and advanced televisions. All of these devices are in play as possible venues to execute payments, Pomeroy said.
"There's a lot of cutting edge technology there that we can look at," Pomeroy said.
For example, Westpac recently launched a mobile payment app that gives users of Samsung's Galaxy S4 and Galaxy S5 handsets the option to make contactless payments using the devices' built-in Near Field Communication technology.
Samsung's Galaxy S5 can also support fingerprint scans for a second factor of authentication for payments and other functions, and PayPal already supports this technology on Samsung's phone.
Samsung did not return a request for comment by deadline.
Wearable technology is relatively new to financial servicesWestpac is one of the first banks in the world to have a smartwatch app, though other banks such as Barclays and CaixaBank issue payment-capable wristbands.
Westpac is running a number of other technology projects, including an expansion of its mobile banking functions and a test of a mobile wallet that uses host card emulation for contactless payments. It is also testing Bluetooth-based beacons in its branches.
The bank this week also unveiled an augmented reality app for account management. This app displays 3D imagery over the user's credit or debit card when viewed through a smartphone's camera. The images show balances, transactions and other details.
Other than paying the user's credit card bill, Westpac does not have payment-specific functions on the augmented reality app, though it may add such features after the mobile app relaunches in 2015, Pomeroy said.