If wearable technology is simply a fad, it’s certainly doing a good job of sticking. According to the Kleiner Perkins 2017 study on Internet trends, 25 percent of Americans own a wearable device, and 102 million wearables were shipped globally in 2016. No longer considered a mere toy of the modern age, wearables are increasingly popular and functional.
But first, what is wearable tech? By definition, wearable tech (or “wearables” for short) are gadgets that can be worn and offer the wearer a heightened level of connectivity due to smart sensors and built-in web and smartphone connection. Businesses, which must respond to consumer trends to capitalize on new sales and engagement opportunities, are beginning to go beyond mobile-friendly website design to incorporate NFC-enabled payments. These new payment methods allow businesses to reach their customers in new ways and reduce payment friction.
According to Visa’s Global Market Research on Contactless report, 94 percent of U.S. merchants that adopted contactless payments saw it impact their customers positively. It’s no wonder why tech titans like Apple debuted their contactless payment technology back in 2014. Fitbit, a San Francisco-based company that builds fitness trackers, is now releasing its first product with near-field communication (NFC) that can power contactless payments. But how do contactless payments work, and how can you integrate them into your buyer experience?
Originating in the 1980s, NFC technology took off among the major credit card issuers and payment networks in 2002 with the introduction of industry-wide standards that paved the path for experimentation. Consumer adoption increased over the last few years once NFC-enabled payments were integrated into smartphones.
Mobile payment systems that run on NFC do not store digital cash (whereas mobile wallets, like Google Wallet, do). Instead, NFC-enabled devices store encrypted credit card information. To access payments and protect customers, device account numbers and uniquely generated security codes are required for authentication. Additionally, biometrics can be used for heightened security.
Mobile payments on NFC devices are easy for customers. They simply open their mobile payment apps, wave their phones over NFC card readers, and move on with their day with their new purchases in hand. Processing takes seconds, with the same fee structure as traditional credit card payments.
So, why is the introduction of Fitbit Pay particularly advantageous for a health-conscious customer base? Well, on-the-go, active consumers might not have their wallets on them when they visit the gym or go for a run, making it impossible to pay for anything they might need while exercising. Businesses with a health-conscious customer profile similar to Fitbit’s can uniquely serve these customers and gain repeat business by adopting NFC technology.
But it isn’t only fitness enthusiasts who are adopting mobile payments. According to Business Insider, 16 percent of the general population has made a mobile payment purchase; however, this percentage increases to 36 percent among millennials. Paying attention to these trends is critical for businesses targeting this demographic.
So, how can you adopt mobile payment technology? Easy: Simply partner with a provider that enables these payments.
There are numerous Smart Terminals on the market that can help your business accept a broader array of payments. We recommend one that offers the following benefits:
Strategy Analytics projects that NFC transactions will reach $160 billion by 2020. Get ahead of consumer trends to avoid lost sales opportunities as NFC takes off.
What’s your opinion on mobile payments and wearables so far? Are they quick fads you don’t see catching on or something you’re taking seriously as a business? We’d love to hear from you!