Essential Retail's View from the Top is a regular series of interviews with executives operating at the heart of the retail technology industry. This week, the focus of the feature is Tami Hargreaves, commercial director for digital consumer payments at Barclaycard.
The global value of mobile and wearable contactless payments is expected to reach $95 billion annually by 2018, up from less than $35 billion generated in 2015, according to Juniper Research.
The analyst group anticipates the continued emergence of smart watches and wristbands – such as those underpinned by Apple Pay technology – will drive this trend, adding that the emergence of a range of connected wearables has piqued the interest of NFC stakeholders.
Mastercard, Visa and Barclaycard are each exploring opportunities and facilitating ways for consumers to pay with wearable devices, too, and there is certainly growing momentum behind the merging of fashion with payments.
In January, Mastercard announced a partnership with the now Fitbit-owned payments tech firm, Coin, to bring payment functionality to an array of fitness bands, smart watches and other wearable devices. Fitness tracker designer, Atlas Wearables, personal fitness coach, Moov, and fashion-led smartwatch company, Omate, were named as the first set of businesses working with MasterCard and Coin to integrate payments into their products.
Meanwhile, Visa has been dabbling with augmented reality technology to develop a payment app with House of Holland that allowed customers to hold up their smartphone at a garment on the catwalk, automatically completing the transaction with a pre-registered prepaid, debit or credit card. It's a different approach to Mastercard, but an example of how the link between the latest fashion and technology is strengthening.
Barclaycard's advances into the fashion wearables space has seen the company team up with Topshop to place NFC payment tech in a range of accessories, while last week the company announced a new venture, Loop, which is effectively an NFC chip that consumers can attach to items they already own in order to make payments of £30 or less.
Essential Retail caught up with Tami Hargreaves, commercial director for digital consumer payments at Barclaycard, to get her take on the wearable payment trend.
"The trends we've seen have focused on the fitness and health space, but we're starting to see some diversification now in terms of different ways to utilise the technology we may wear – the fashion link, for example," she explained.
"We think wearables are going to continue to grow. I think there's been some cynicism – if you think about the innovation hype curve – I think wearables is at a much earlier stage of the journey to mobile [payments] which has had a number of iterations. It takes a long time to create new categories, and I think wearables is really showing some strong signs."
Loop is the newest product from Barclaycard's bPay range, a line of NFC-enabled items that customers can use to pay for goods or services where contactless transactions are accepted. While the initial range, which was launched last year, allows consumers to pay with a bPay-branded wristband, fob or sticker, Loop is a small case containing a contactless chip, that is designed to slide over any watch strap or fitness band a consumer may already wear.
While bPay may not have the glamour of the likes of Apple Pay, Barclaycard believes the initial partnerships it has secured with watchmaker, Mondaine, and fitness device manufacturer, Garmin, show its potential. Both of these brands will offer Loop to those purchasing selected items from their ranges.
Loop has been designed to fit wristbands with an opening buckle and measuring 22 mm wide and under, and it has an up-front cost of £19.99. The payment tool, which can be topped up with cash via a digital wallet linked to the device, is accompanied by a mobile app, meaning users can instantly cancel their bPay in the event of theft or loss.
"The landscape is right to be disruptive to bring new ways to pay for customers," argued Hargreaves, who said there is a dual strategy at Barclaycard to serve new transaction methods straight to the consumer and to partner with other businesses to add value to the services and products they already offer.
"We've had a great reaction so far, and we're encouraged by people seeing the convenience and the simplicity of the idea," she commented.
Hargreaves said that the company is always taking on board customer feedback, and part of the justification for the launch of Loop comes from consumers sharing images of the different ways they were using the original bPay products. Evidently the business case is there, too, because since the original range was launched one year ago, 100,000 bPay products have been sold and used to make a million transactions totalling just over £5 million.
"While customers were telling us they loved the bPay concept, they didn't want to wear something extra – they wanted to integrate it into something they already wear today," Hargreaves noted.
On the subject of integrating payment capability into items people "already wear today", Barclaycard's partnership with Topshop has seen selected wristbands, smartphone cases and key chains all developed to hold the small bPay contactless chip.
It was part of a process, according to Hargreaves, to take contactless beyond Barclaycard's and Barclays' existing user base.
"We see more customers using the bPay product now who don't have a traditional relationship with the bank," she explained.
Hargreaves' role at Barclaycard means she has overseen projects such as the roll-out of contactless cards in the UK, and campaigns around the rise in the contactless payment limit and the card company's work with Transport for London when introducing frictionless payments at the barriers in the London Underground. So what's next on the agenda?
"We are committed and continue to be committed to exploring fashion and payment fusion because we think there is something quite interesting in that space," she remarked.
"We have some different innovations and executions around wearables – and we're also working on some other deals. There are a wide range of executions – exploring the alignment with non-payment mobile devices, fitness, fashion, automotive. With smart cars and connected cars, there's a nice alignment there and we're talking to a number of people."
Hargreaves also noted that biometrics is "a really interesting space" in the payments ecosystem, and there are certainly a number of technology companies working on solutions in this field. Vendors such as Ingenico Group, Fujitsu and Zwipe – in association with Mastercard – are among the companies looking to push biometric-led payment to the market, using a range of solutions from fingerprint passwording to palm-vein reading.
"We're continually reviewing and assessing where we want to play in that space, and talking to many other players in the market around evolving technologies," explained Hargreaves.
"I think we're going to see more biometrics. I think it will enable different ways to pay. We talk very much about invisible payments and I think we'll move towards your biometric unique recognition allowing payment to be made or taken in a different way to the proximity payment that we make today, via mobiles and wearables. I'm really interested in that space and it's something we're actively exploring right now."
As with much of the innovation the retail industry is experiencing today, it is set to be consumer driven. If customers like the technology or they feel a need to use it – be it for the sake of security, convenience, a mixture of the two or something different altogether – then it will take off once the relevant stakeholders have laid down the infrastructure.
For Hargreaves, increasing convenience is an important factor and removing barriers in the transaction process is a key goal – whether that is via wearable technology or biometrics. "The effortless that goes into something that is almost happening behind the scenes has to be a win-win for business and consumer."
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