Alternate payment solutions are becoming increasingly imaginative. From wrist watches and fitness trackers, to wristbands and jewelry, anything that you can wear is now being used as a means to execute payment transactions.
The online banking company PSI-Pay specializes in prepaid debit and credit card services. PSI-Pay incorporated in 2007 and has a strategic partnership with the Fintech company, Kerv Wearables, to bring consumers globally the contactless Mastercard payment ring- one of the first of its kind.
Signs of a Changing Time
As our lives become more compressed the way we interact with the world is also changing. Emerging trends also influence our communication methods. The smartphone, for example, has now replaced and streamlined more than just communication services, but also news, cameras, computer programs, books, and wallets. With more efficient means of making payments from smart technology, the we bank and pay for our purchases is ever evolving.
With wearable technologies, such as the Kerv payment ring, you’ll literally never need to carry money around anymore. In fact, you’ll never need plastic money – nor a wallet! – for that matter. Alternate payment means you won’t need to authenticate or validate your transactions with a PIN, you won’t need to authorize a payment by signing it, and you’ll never have to provide a merchant with your banking information.
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The Case for Cashless and Contactless
Alternate payment devices, such as the PSI-Pay-supported Kerv Wearables contactless payment ring, will increasingly become the payment mode of the future – and here’s why:
- Less is more: According to a MasterCard UK survey, Britons now carry less cash in their wallets than just a few years ago. In fact, the average cash haul is just £5
- Cashless is growing: The same survey confirmed that the trend for going cashless is increasing, with 43% polled saying they carry less cash today than 2-years ago
- Bye-bye wallets: 20% (1 in 5) of those polled believe that the future will be a wallet-less one. This figure rises dramatically to 32% among the Millennials, 25 to 34-year old’s
- Painful checkout: With consumers having to do more in their day than just a few years ago, no one has the time or patience to line-up for a painful checkout process anymore
- Security concerns: With the proliferation of card-skimming devices, consumers in greater numbers are worried about the security challenges prevalent in physical card-swiping transactions
- Identity theft: The possibility of identity theft is concerning, with such incidents on the rise where contact-based payment, or exchange of credit information online, is the only payment form accepted
There has also been a string of payment processing challenges that have hit the traditional banking model in the UK. In 2013, RBS had a serious mobile banking app failure that left millions of its customers cashless! Then, in 2015, as a result of an IT glitch, NatWest customers were locked out of access to their online banking services. Just recently, customers of British bank TSB lost access to their online banking accounts.
All of these developments have renewed the debate on the over reliance on traditional, and the growing relevance of alternate banking and payment solutions.
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As Europe and growing cashless societies start mandating increasingly stronger payment authentication protocols, emerging technologies like biometrics will become more relevant. However, that future is still a long way off. Wearable technology, on the other hand, is here today – and partnerships like the PSI-Pay-supported Kerv Wearables initiative have made contactless payments less intrusive and more personalized by fusing fashion with functionality.
The big questions, however, are:
- Is wearable technology convenient as a payment mode?
- Is the contactless payment model, like that of the Kerv Wearables payment ring, robust enough to go mainstream?
- Are consumer concerns around safety, security, identity theft and data protection, addressed through the measures implemented by contactless payment processors like PSI-Pay?
- How do these innovations help deal with the challenges that consumers face with traditional online banking?
Watch this review of PSI-Pay and Kerv’s latest product.
If challenges like these are dealt with effectively, in a way that doesn’t sacrifice convenience and security, then the future of contactless wearable payment systems certainly looks promising. Going forward, companies offering these technologies will have to show a commitment to security and protection of personal data for consumers to bring these products to growing mainstream markets.
Addressing the Cashless/Contactless Challenges
Some of the greatest issues, that wearable payment technologies will face, are likely to be around accessibility (widely used), convenience (broadly accepted) and security-safe and secure transmittal of personal and payment data. The PSI-Pay/Kerv Wearables tie-up seems to be addressing many of these cashless, contactless payment challenges that consumers of alternate payment models will keenly watch:
- It is widely acceptable – over 38 million locations globally
- It’s low-transaction value (up to £30) offers less impact and lower stakes if there is a fraudulent transaction
- The ability to tap on trains, the tube, and buses around the UK and Europe, as well as at the pub, grocery stores and restaurants, could propel it into mainstream status
- It’s ability to use NFC to share personal data with other NFC-enabled devices – with no need to physically hand-over the ring to a merchant – adds a layer of security to payment transactions
- The ring can be linked to other contactless payment vehicles – such as prepaid cards – for higher-value payments, offering the potential for other uses
- The ability to top-up balances using wide range of sources, such as PayPal, Credit cards, Debit cards or bank transfers, will add consumer choice to how they pair the rings with their day-to-day banking
- The fact that it is governed by FCA regulations gives consumers added confidence in the product’s potential as a mainstream payment device
Wearable contactless payment devices can certainly add convenience to the lives of consumers. And as developers and payment processors embrace new regulatory regimens and security standards – such as encryption – these alternate payment devices will quickly attain mainstream status.
For instance, with WiFi and Bluetooth enabled smartphones paired with wearable devices, the concern has always been: What other (unauthorized) devices are connecting to your smartphone to compromise your payment transactions? By getting away with the pre-requisite of being paired to a smartphone to operate, devices like Kerv’s contactless payment ring have certainly addressed some of those concerns.
Contactless wearables can only hope to become mainstream if they offer more than just payment processing abilities. Tech giant Cisco estimates that the number of wearable devices will swell to over 600 million by 2020. Workplace regulations, around Bring Your Own Device (BYOD) will therefore need to keep pace with changing wearable technology, if such devices hope to be integrated into broader aspects of our lives.
By enabling secure sharing of personal data in compliance with the UK Data Protection Act (DPA) – such as medical details, emergency contacts using NFC capabilities, and featuring more practical uses such as access to office lockers and secure work locations, wearable devices like Kerv’s payment ring are providing yet another practical use case to justify their broader deployment.
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