It could be bad news for leather, cloth, and duct tape: new technologies are campaigning to make traditional wallets go the way of the Walkman.
The technology of currency has never stood still, evolving from 12-foot stone wheels all the way to credit cards, and the shift to mobile is just the latest example of its evolution. Over the past several years, mobile wallets — transaction-capable apps that store your banking, credit card, and loyalty information on your smartphone — have been the contender for next big thing.
While mobile wallet familiarity is on the rise, the technology is far from ubiquitous, and a new challenger has already arrived. Wearable wallets aspire to be even more portable and convenient than their mobile counterparts by embedding payment technology into a worn accessory like a ring, cufflink, watch, or pair of glasses. But like any new technology, wearing your wallet on your sleeve comes with both benefits and challenges.
Benefits of wearable wallets
- Ease of use
“Payment capability in a smart watch means users do not even have to pull out their phone,” says Wilson Kerr of Unbound Commerce. Advocates of wearable wallets cite the convenience of transacting by simply tapping your watch at a checkout counter, and their potential to give consumers the most streamlined, frictionless payment experience possible. As PayPal’s John Lunn says, “the best type of payment is the payment you don’t see. You want it to be invisible.”
By moving transaction off of smartphones, wearable wallets have the ability to operate without the need to interact with mobile carriers. In addition to reducing user costs, this move would also result in a more open, accessible market. According to Drew Sievers, CEO of mFoundry at FIS Mobile, “moving into wearables is a far easier proposition in some ways than trying to break through the carrier-controlled mobile hegemony.”
Challenges of wearable wallets
The challenge of protecting users’ personal banking information (which is also faced by mobile wallets) is one of the most significant hurdles to cross before mobile payment technologies will become widely used. Since it is attached to its user at all times, a wearable wallet will also contain a wealth of personal, transaction-based data and will require robust security measures to keep it safe.
Designing an accessory that unites technology and fashion is no easy feat. “The most important thing to remember about the future business of wearable tech is that it needs to be intuitive and human,” says Billie Whitehouse of Wearable Experiments. For technophiles, the appearance of a wearable wallet might not be the most important factor, but for widespread use its aesthetics will have to strike the right balance between futuristic, functional, and fashionable.
Are we ready for the future?
For the loyalty industry in particular, the organizational and ease-of-use benefits of wearable wallets are significant, as they are with mobile, smartphone-based wallets. Being able to embed all your loyalty information into a portable device attached to your wrist or finger would make earning loyalty currency at every opportunity a no-brainer. But given the adoption challenges that have dogged mobile wallets and the new set of issues unique to wearable payment technologies, it seems unlikely that wearable wallets will have an easy path to ubiquity. Though some forward-thinking early adopters are already on board, it looks like the obsolescence of cards is not in the cards for the near future.
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