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Are wearables a little too late to the race?

 

Barclays recently launched a trio of new wearable contactless payment devices, branded Bpay collectively.  Bpay consists of three ‘wearable’ options; a wrist band, a key fob and not so wearable phone sticker.  In the UK contactless payment has been extremely popular, particularly last year; consumers used contactless cards on more than 319million occasions, spending a combine total of over 2.32billion – clearly a trend not to be ignored.

Paying with a contactless card is fast; as no pin is required, easy; just tap and go, and secure as only EMV certified terminals accept contactless, with a limit of £30 (raised from £20 this September) spend per transaction. Wearable payment devices offer the consumer a new alternative to the contactless card, using the same technology as the card, all the wearer need do is tap their wrist band, key fob or sticker on a contactless enabled terminal and the transaction is complete – Genius! Well, maybe 7 years ago when the contactless card was first released.

So let’s take a closer look at Bpay specifically:

The Good:

  • Control over spending – the device is prepaid and therefore you can only spend what you have in the account.
  • Fast – no need scramble for your wallet on the tube.
  • Secure - £30 limit per transaction and easily deactivated from your online account.
  • Auto top-up – specific to Bpay, you can set your device to be topped up automatically when your account falls below a specific amount.

The Bad

  • The auto top-up function, whilst handy to ensure you are never left without the ability to make a payment, surely contradicts the control you have over a prepaid device as essentially your spending is now no longer restricted by the amount you have in your account.
  • Not quite as fast as the contactless card; upon tapping a POS the terminal needs to contact your Bpay account to ensure you have funds.
  • A £30 limit, with no option to enter a pin for higher amounts seriously limits the scope of spending
  • The Bpay devices expire after 2 years, at which point you must purchase a new one; it seems unlikely that Brits will be willingto pay to spend their money.

The Ugly

Let’s face it, they are. Targeting trend led, fashion conscious and fast moving millennials you might think would provoke a little more thought into the styling of these devices.

Starting with the sticker, it looks like a mini payment card, stuck on your expensive smartphone. Having used one of these briefly when it was issued for free (the sticker now costs £14.99) it quickly became apparent that dirt sticks to them, they damage/break down easily and leave a sticky residue on your phone….nice.

The fob does however go some way to redeem the wearable option, it is compact, sleek and looks a little like an expensive car key – although if you’re anything like me, anything attached to car key is scratched, battered and lost within an impressively short period of time. Despite the minimal redemption I can’t help but notice a relatively obvious flaw in the key fob; it’s not really a wearable. Instead of fishing through your wallet to find your card you now need to find your keys, take them from your bag or pocket and present them to a POS terminal; my card is much easier and cheaper to replace than my car key so increasing the chance of losing it means I’ll be passing on the fob.

We are left with the wrist band, perfect for people rushing around on the tube, buying coffee on the run or who want a statement piece to match the Bluetooth headset they still wear to walk to the shops. I can’t get my head round this one, it’s a chucky, black rubber strap resembling the type that usually come with a curfew and distance parameters.

The future of the wearable?

Wearables are a little late to the table and would’ve been more successfully marketed alongside contactless cards. In an attempt to remodel the otherwise awkward looking wearables, Barclays has teamed up with fashion brand Lyle and Scott. Together the bank and clothing brand have produced the ‘contactless’ jacket. Pitched at £150 it’s a hooded, fleece lined jacket with a tiny pocket in the sleeve, where lives the contactless chip. The chip expires after 2 years and so will need to be replaced; there is no mention of where to replace the chip, or the cost of the chip alone. Not to mention, this type of wearable is surely seasonal? Ok if you only spend in the winter I guess.

As a consumer, yes I want faster, easier payments, where I am in controll. This is only achieved with Bpay when I am using my mobile phone to monitor, track and amend my account. Having to use my mobile alongside a wearable device means I have switched from using a single contactless payment card to now using two devices. It would be much easier if I could complete the payment using just one device, my phone; with my balance, spending and payment displayed in a single place.

The wearable payment option is a sailed ship, offering less convenience as a contactless card. It’s fun, but only time will tell if it is no more than a gimmick.

 

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Comments: (3)

A Finextra member
A Finextra member 16 September, 2015, 16:13Be the first to give this comment the thumbs up 0 likes

James- A few comments. "Wearables are a little late to the table?"

Not according to Tractica's research and consulting firms report, "Wearable Payments to Drive More Than $500 Billion in transaction volume annually by 2020"

Even if their report is 50% inaccurate, wearable payments are set to increase significantly. 

I understand the direction of your post, but I think you've singled out Barclays bPay a bit harshly. Barclays attempt at wearables, along with other wearable startups, can only get better. 

Regards,

Dale Buckey

-Developer at PAY.band


Wearable Payments to Drive More than $500 Billion in Transaction Volume Annually by 2020
A Finextra member
A Finextra member 16 September, 2015, 16:50Be the first to give this comment the thumbs up 0 likes

What about wearables such as the Apple watch or Android type equivalents? Are they too late in the day? The Bpay band is ugly, is far from perfect but as a transitionary product while Barclays fudge around finding an Apple Pay solution, it works. More and more connected wearables using cloud based payments or 'mobile' based solutionw will come to market and I see nothing but growth here.

A Finextra member
A Finextra member 17 September, 2015, 06:17Be the first to give this comment the thumbs up 0 likes

Having a hole in your jacket to stick a CARD in isn't exactly 'new' technology. I have a pocket in my trousers and one in my jacket... and for years I havekept my card in these pockets. I don't see this as anything other than flash in the pan. Wearable watches or a car key with a payment mechanism is great but a card stuck in a pocket isn't wearable! Grow up!