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Wearables open up a new financial services frontier, expert say

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Wearable technology has made waves in the payments sector and all indications are that it has the capacity to transform the way we think about paying for goods and services.

Over the last three years in particular, there has been considerable growth in wearable payments.

“The hardware has evolved significantly,”  Rob Morgan, VP Head of Sales and Partnerships, Mobile Payments, at UK banking group, Barclays PLC explains. “When [Barclays] first launched bPay– our wearable contactless payment product – the near-field communication (NFC) chips that make contactless payments possible couldn’t bend, so it was difficult to incorporate them into everyday devices and accessories. Now, thanks to the development of our game-changing, flexible bPay payment chip, we can transform almost any object or fashion accessory into a stylish payment device.”

He continues: “I’ve also seen a broadening of the applications of wearable payments, some driven by APIs, and some driven by need or differentiation. I would say that the biggest change that I have seen is how the mass consumer adoption of contactless has had a reciprocal effect on the public’s willingness to adopt related technologies such as wearable and mobile payments.”

For Morgan, Barclays’ pioneering position in this wearable payment space is due the experience of many of its team members in both the mobile and retail arenas, giving them additional insight into consumer retail behaviour, as well as showing them just what technology is capable of.

“Mobile is a fast and competitive industry, and I was lucky enough to be involved in launching new technologies to market, such as 3G and Mobile Broadband,” he says. “Barclays has a rich history of innovation, and that fits perfectly with the entrepreneurial and commercial mentality that I brought over from my mobile roles.”

In line with the bank’s tradition of product innovation, and not content to rest on its laurels, Barclays is continuing to evolve its bPay offering to better meet the needs of its customers.

“Earlier this year we announced seven new watch partnerships with major fashion brands, such as Guess and Timex, at Basel World, so we are busy bringing those to market,” says Morgan. “Alongside that, we are currently working on some new strategic partnerships in other sectors, and also on adding more functionality to our devices beyond contactless payments.”

This ongoing development of bPay wearable payment technology is being driven by tangible changes in consumer behaviour. “This year we’ve seen triple-digit growth in wearable payments, and feedback from customers on our recent partnerships has been extremely positive,” he adds.

For Barclays, wearables have a bright future ahead of them, giving consumers a wider choice of payment options to suit their needs. But there are challenges ahead. While tokenisation – substituting sensitive payment details with a non-sensitive “token” to allow safe one-click payments – has the potential to truly optimise security for wearables, the development and implementation of the technology has been slower than some anticipated.

Nevertheless, Barclays is hopeful that 2019 will be the breakthrough year for the introduction of tokenisation in wearables – helping the technology to go a long way towards reaching the consumer payment mainstream.

“Wearables are still an emerging technology, but as more manufacturers realise how easy it is to add payment functionality to their devices, and the benefits that brings to them and their customers, the faster the market will grow,” Morgan concludes.

Image: Barclaycard

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