Paying with your smartphone and sports watch will soon be ‘the new normal’
After finishing a morning run, you drop in at a coffee shop. A barista hands you a latté and with one tap of your sports watch at the payment terminal, you’ve paid for your coffee and are out the door. No wallet, credit card, PIN or receipt.
While it may sound like the latest fad, the truth is that in our fast-paced lives "no fuss" mobile payments will soon be the new normal.
Moving to mobile
Investec Private Banking has announced that it is enabling mobile payments for sport watches and smartphones. Through Samsung, Garmin and Fitbit Pay, the bank’s clients can now pay without physically having their Investec Visa card with them for the transaction.
This payment method is facilitated by Visa and supported by most merchants, which have adapted their payment terminals. Each transaction is securely encrypted through tokenisation.
“Most of us are time-poor and looking for ways to makes our lives simpler,” says Devina Maharaj, head of Digital at Investec, South Africa. “We don’t want technology that is distracting or a passing fad, we expect it to enhance our lives in a relevant way. At Investec, we’re always looking to create frictionless digital experiences.”
Technology is changing the way we live, connect socially and access information, especially about ourselves and our bodies. Fitness devices, which track our physical activity, are becoming increasingly popular. While we may no longer carry our wallets everywhere – or even take our smartphones with us for a run or cycle – these devices are ubiquitous.
When you use your watch or phone to pay, it’s essentially still a card transaction, but it’s now assumed a digital form factor.
In effect, payments are made ‘invisible’ by the underlying technology and a physical piece of plastic is replaced by a device. To make sure a payment is as secure as possible, the device has an authentication process (a biometric fingerprint or a strong passcode) and the transaction itself is encrypted through tokenisation.
Tokenisation, as a form of encryption, is highly secure. It transposes the 16-digit credit card number with a unique code throughout the transaction cycle, so a card number is never stored on a device or shared with a merchant.
“Furthermore, the token is unique and attached to a single device,” says Mark Dabbs, Fraud Operations Manager at Investec.
“Unlike traditional sites, tokenisation technology doesn’t store card information on file. This significantly reduces the impact of data breaches and the likelihood of a fraudster accessing payment information. Mobile payments are as, if not more, secure than any other form of payment.”
The shape of things to come
With more than 30 billion devices set to be connected to the internet of things by 2020, wearable technology will shape not only financial services, but also other industries like access, security and healthcare. Moreover, tokenisation is built on blockchain architecture and is laying the tracks for evolved payment systems that will make it easier to facilitate payments.
And the future of wearables is not just in sport watches. Premier brands like Mont Blanc and Swatch will be launching payment features in the coming months. State-of-the-art and personalised jewellery, with a silicon chip in a ring or bangle for payments or access, is already on the market.
“Technology can never replace the human touch in a client experience,” says Devina. “What it can do is give them more choice and convenience.”
Investec Private Banking clients can set up their devices and pay on the go with Samsung Pay, Garmin Pay™ and Fitbit Pay™