By Ray Birch
TUKWILA, Wash.—It’s not too soon to begin supporting wearable payments, according to BECU, which believes credit unions will need to do so to keep pace with where their members are headed.
As CUToday.info reported, CO-OP Financial Services is supporting BECU, a day-one issuer of Mastercard’s payments services for Garmin and Fitbit wearable devices. Mastercard recently announced it is adding payment capabilities to the newly launched Garmin vívoactive 3 to provide active customers a watch that frees them from having to carry their phone or wallet around.
“Yes, we are going with Fitbit and Garmin wearable devices for our debit cards,” said Nidhi Shandilya, BECU digital payments senior manager of product management. “We want members to be able to make payments when they are on the go.”
“On the go” today, said Shandilya, often means staying active and exercising. “Wearables are a great use case for active people who don’t want to carry their phones and don’t want to pay with sweaty bills. We simply want our members to have access to all of the new payment options that are emerging.”
Amy MacMullen
A Real Movement Today
BECU has held that opinion since digital wallets arrived years ago and was one of the first financial institutions in the country to support Apple Pay.
“We think there is a real movement today by consumers to put their phones down, to disconnect and focus on themselves, especially when they are working out,” said Shandilya.
Amy MacMullen, senior product manager at CO-OP Financial Services, Rancho-Cucamonga, Calif., does not think wearables are a fad.
“We think consumer adoption of wearables will continue to grow. I saw data from IDC that shows wearable usage will double by 2021,” said MacMullen, who also believes the focus will be on fitness. “Clothing is coming out you can pay with, like heating and cooling garments, smart sunglasses, a lot of interest in things related to health.”
MacMullen noted that the growth of fitness trackers is taking place due to the ability of the devices to “coach” consumers as they work toward fitness goals.
“Today there is a lot more focus on your health and coaching to get you to the next level,” said MacMullen.
Market To Double
With the wearable market expected to double in the next few years, MacMullen said credit unions would be wise to monitor membership and what they want in payments supp
Ken Myhra
ort.
“Credit unions always want to be seen as innovative, and they want to reach the younger market, which is adopting these fitness devices and using them for payments,” she said.
MacMullen said that she does not think wearable adoption will mirror the slow pace of digital wallet adoption that FIs witnessed when Apple Pay and Samsung Pay first hit the market. She said there are many more NFC-capable terminals today than when digital wallets fist emerged, and much more education around how to use tap-and-go payments.
“Back when Apple Pay launched there was not much understanding from consumers on how to use the devices and also from retailers on how to accept these payments,” said MacMullen. “That situation has changed.”
But the number-one seller of digital payments, insists Ken Myhra, director of retail payment and deposit products at BECU, should be the security tokenization provides. He said credit unions need to find a way to sell that aspect of digital wallets and wearable devices.
“This is a safer way to pay. Yet, as an industry we have yet to find way to make that point sexy—it’s too technical,” said Myhra. “We have not found a good way to tell members that paying though digital wallets and wearables leverages tokenization and keeps their data safer.”
Expanding Support
Shandilya said BECU will continue to expand support for members’ digital payment needs.
“We do see this expanding to more than just wearable, but to IoT devices as well,” said Shandilya. “Wherever this goes we will go with our members, making sure they have all payment choices that are available.”
That’s a good idea, insists MacMullen.
“The key point to credit unions is that once someone loads their payment card into a digital wallet, it is very rarely switched,” MacMullen said. “The idea then is to be first to the game and in the number-one position with members in any of these new forms of payments.”