The Dawn of the Payment Tattoo

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I have my eye on a new tattoo!

But this tattoo is far different from the inked lettering and designs I have already. It's even a stretch to call it a "tattoo" – despite the branding, it's really more of an adhesive bandage with a high-tech spin.

VivaLnk's tattoo, better described as a Near Field Communication-enabled sticker, is a baby step in the advancement of wearable technology. It will stick to the user's skin for up to five days and can be used to unlock Motorola's Moto X smartphone – and that's it. It can't be used for payments today, but if the concept takes off, someday we all might use stickers to assign different payment cards to different parts of our bodies (and, inevitably, joke about purchases costing "an arm and a leg" based on which limbs we have to tap to pay).

NFC is already used in some mobile payment systems, including Google Wallet and Isis. But it's the technology's other uses – as door keys, car starters and even Bitcoin wallets – that is inspiring creativity in how to further embed NFC into our everyday routines.

During last weekend's Hackers on Planet Earth (Hope X) conference in New York, Becky Stern, director of wearable electronics at AdaFruit Industries, described how she shellacked NFC tags onto her nails to help her unlock her phone.  People can also buy an NFC Ring if they don't want to ruin their manicures.

The new NFC tattoo, which can be peeled off at the user's convenience, is perhaps more palatable than a decade-old effort by MasterCard to explore a payment chip that could be implanted under the skin.

NFC tattoos more closely resemble the payment-capable NFC tags banks issue to consumers to stick onto smartphones. Banks such as Barclays, U.S. Bank and La Caixa, offer these stickers, and startups such as Moven use the technology as well.  Barclays has issued more than 1 million of its PayTag stickers since the product's 2012 launch.

But even given the success of some issuers' payment tags, they may not translate well into a wearable product if consumers find them unfashionable. Bling Nation, a now-defunct mobile payment provider, learned that people would rather adorn their phones with pink camouflage stickers than a bank's logo.

Merchant acceptance is another concern. "Anything with NFC and used for payments has a big hurdle to get over…because there isn't the ubiquity of people able to use it at merchants yet," said Todd Ablowitz, president of Colo.-based Double Diamond Group, LLC.

However, NFC tattoos may fare well in closed-loop situations similar to how Walt Disney Co. uses payment-capable wristbands called MagicBands at its theme parks. Doling out small stickers could be cheaper than manufacturing the wristbands.

Here's how the NFC tattoo works today:

Unlocking a smartphone with a PIN or other type of password typically takes about 2.3 seconds, and this process is so cumbersome that more than 50% of users don't lock their phones, according to Google. A with the average using authenticating their phones more than 39 times a day, a user spends roughly a minute and a half each day trying to get past the phone's lock screen.

Iska Saric, a Google spokeswoman, would not discuss future use cases for the NFC tattoo, so all we know is that it can save time in unlocking phones. But is this problem big enough to justify spending $9.99 a month on disposable stickers?

"To save a little over a minute? I'm good; I don't need that," said Sam Maule, manager at Carlisle and Gallagher Consulting Group. "It's a gimmick by Motorola."

And there's no doubt; the VivaLnk technology is definitely more of a sticker than a tattoo, but the latter is a much more loaded word. 

However, the concept of using one's body for authentication is exciting, Maule said. Software that detects users' unique characteristics, like their scent or how they hold a phone, is the next step in this progression. "I want to be the form factor," he said eagerly.

But a product like the NFC tattoo "shows we're still struggling to find use cases for wearables that connect to the phone," Maule said. "We're so early in the game. It reminds me of the incredibly bad websites in 1999; everyone could create a website so why not."

Bailey Reutzel is a reporter for PaymentsSource.

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