As the range of wearable devices available continues to grow, the use of wearables is increasing. We had an opportunity to ask Adam Herson, Business Development Director at Barclays Mobile Payments, a few questions about how wearables are being used for contactless payment in UK.
More and more known luxury watch brands are adapting technology into their products. One such example is mobile payment functionality. Do you see a future of this technology? Will we see a continuous growth in this sector?
Barclaycard’s latest Contactless Spending Index data reveals mobile and wearable payments are growing rapidly, with the amount spent increasing by 365 per cent and 129 per cent respectively in just 12 months.
This is thanks to new, connected technologies such as Barclaycard’s bPay, which is enabled by a unique, flexible chip that can be embedded into a variety of products such as watches and jewellery. Such technologies are rapidly gaining in popularity – customers simply set up an account on the bPay mobile app, activate their wearable item and can make payments of up to £30 without needing to carry a card.
The increasing demand for payment-enabled wearables has been driven by two important factors; security and simplicity.
No matter the item it’s embedded in, using this new tech is simple and accessible. The last thing that customers want is to spend unnecessary time and energy searching for cash or their card.
Take, for example, a gym session – most gym-goers don’t want to carry cash or even a card with them inside the gym, but they may want to buy a bottle of water when they step off the treadmill. A connected wristband allows them to exercise freely but still have access to payments at all times. It can also give them access to the gym itself, making that process more secure and convenient. It makes the overall experience better – and it helps the gym to continue to improve that relationship by having better insights into how their customers are spending their money – for example, understanding which classes are most popular and raising the most revenue for them, and tailoring their timetables to meet that demand.
Have you seen a change in consumer habits as a result of new technology and advances in mobile payments?
Connected payment technology is changing the way we spend. Consumers today expect a variety of options when it comes to transacting with a retailer – and it’s all too easy for them to take their custom elsewhere if standards fall below par. Customers enjoy the speed, ease and convenience that contactless brings. ‘Touch and go’ is seven seconds faster than Chip and PIN, and 15 seconds faster compared to cash. Based on this, Barclaycard found that paying contactlessly saves Brits over 141 million hours per year.
Insight from retailers also shows how consumer habits are changing. The surge in popularity of wearable payments creates exciting opportunities for shoppers and brands alike. Consumers can now choose the type of accessory or device they want and match it to their lifestyle or fashion taste.
Additional research has found that retailers who have started accepting contactless payments reported an average 30 per cent increase in sales. As consumer demand in new technology like mobile and wearables continues to grow, businesses that can keep up with this trend stand to see a benefit to their bottom line.
What do you think is the future of mobile payment functionality?
With connected systems, the opportunities are endless. The flexible bPay chip has been intentionally designed so that it is versatile and can be incorporated into a whole host of objects – from the familiar, to the surprising. In the near future, we could routinely use something as simple as a water bottle to pay for our goods when out and about.
The future opportunities wearable payments present for businesses are also key. The value of connected payments goes beyond simply increasing the number of purchases. Every time a mobile payment is made, data is created that provides companies with valuable insight to inform their marketing and sales strategies – from the device the user makes transactions with, to purchase behaviours, preferred promotions, responses to A/B testing, and much more. Retailers are also able to distinguish their most profitable products. Retailers can use that information to tailor the shopping experience to meet their customers’ exact needs. Convenience is paramount, and a smooth payment is vital to offering a tailored, seamless service and customer experience.
With 64 per cent of consumers reporting they already prefer to check out using mobile and nearly half (47 per cent) saying they would consider using wearable payments, retailers can expect further demand for connected payments. Consumers want a more personalised shopping experience, so it is vital that businesses understand their customers’ payment preferences.
Please could you share two surprising facts about mobile payments, as they related to connected payment devices?
In the last 12 months, Barclaycard has introduced the world’s first contactless car key with DS Automobiles, and the company is also working with many brands to embed bPay chips into everyday products, to allow customers to pay quickly and easily. This month, bPay announced a partnership with Suunto, the Finnish manufacturer of sports watches, dive computers and sports instruments, to broaden its offering for sports enthusiasts with a bPay-enhanced version of the Suunto 3 Fitness watch, launching later this spring. We are also excited to have partnered with fitness band provider Nuband to incorporate contactless payment functionality. The contactless-enabled Nuband devices are already available to buy through high street retailers in the UK.
Barclaycard’s ‘Time is Money’ report surprisingly found that ‘touch and go’ spending is set to rocket 317 per cent by 2021, with contactless payments expected to save UK shoppers almost £1 billion worth of time over the same period. The research also showed that two in five retailers who accept contactless now only accept card payments or plan to become completely cash-free in the next five years.