Wearable technology has reached the tipping point—the moment in its evolution at which it moves from the world of science fiction and enthusiastic early adopters into the mainstream market. For the retail world, that means many new opportunities to reinvent and improve the consumer experience.
MasterCard and Toronto-based wearable start-up Nymi provided a glimpse into the near future of wearable technologies and how they will affect the in-store experience recently at DX3, Canada’s largest digital retail conference.
It starts with the realization that wearable devices have become ubiquitous. They are everywhere, from popular fitness trackers to Google glasses to the Apple Watch, its Android-based TAG Heuer smartwatch counterpart, and many others. In most cases, they provide information or access to information, which can certainly be used to enhance the retail experience.
However, the emerging next step, championed by companies like MasterCard and Nymi, is wearable devices that enable the entire transaction and create new transaction moments.
In this pursuit, MasterCard’s goal is to advance contactless payments in ways that create the best, safest, most secure payment experience for consumers while making retail operations more effective and enabling retailers to innovate and personalize. In fact, from our point of view, payment should be in the background for our cardholders. We want to enable retailers and companies like Nymi to create a great retail experience, and payment is the last thing they need to think about. They just know it’s safe and secure, and they can get on with their day.
It sounds simple, but it takes a great deal of technology and innovation to give consumers and retailers peace of mind that it will always work, everywhere—in MasterCard’s case, 50 years of network building, security innovation, and a global reach.
As new technologies emerge, payments systems must continuously evolve the security layers, but never at the expense of convenience or ease of use. These must also continuously improve, as they have from the days of the signed credit card receipt, to the chip-and-PIN card and now with contactless payment.
The next step along the payments innovation continuum is a process called “tokenization.” That is the substitution of a token—something that represents an individual consumer, but doesn’t carry any sensitive or private information. For example, with the Apple Watch, none of the Apple Watch user’s payment data is stored on the Apple Watch. Instead, a token that stands in for that data is used to link back to the user’s iPhone.
The token makes the Apple Watch or other wearable devices more secure for users. But, the Apple Watch user still must enter a passcode every time they put their watch back on. The next step is to make these devices even more convenient and that’s where companies like Nymi come in.
Nymi is a MasterCard partner that has developed the Nymi Band—a wristband that continuously authenticates users based on their unique heartbeat. It eliminates the need to enter a PIN. It’s always you and it can always only be you.
The result is a faster, smoother, easier transaction, which can occur anywhere. With Nymi, we can achieve our goal of ensuring payment is secure, fast, easy and unobtrusive. And retailers have enormous new opportunities to shape buying experiences.
For example, by combining MasterCard’s innovations with tokenization and the Nymi Band’s always-on authentication with something like the MasterPass digital wallet, consumers could walk into a store, pick up their purchases, tap their PayPass and walk out with their purchases without having to stand in a check-out line. No signatures, cards to swipe, or PINs to enter. No consumer data is put at risk, and there is continuous verification for the retailer that the consumer is who he or she claims to be.
With that marriage of security and convenience in a wearable, retailers will also be able to layer on what they know about their customers to create personalized experiences, increase sales and build customer loyalty.
For example, a customer who is a member of a store’s loyalty program could enter that store wearing a Nymi Band, the store would instantly recognize that person is a loyalty club member and look at his or her past transactions to customize a unique and valued experience.
With the increasing popularity of wearable devices, and the emergence of innovative companies like Nymi, the possibilities for retailers to create new customer engagements, experiences and offers are literally unlimited, as long as behind it all there is payments technology that provides absolute security with minimum intrusion.
Jason Davies is the vice-president of emerging payments at MasterCard Canada. Insights are summarized from a panel discussion he was a part of, along with with Shawn Chance, vice-president of marketing and business development at Nymi and technology columnist Jesse Hirsh at DX3 in March 2015.
