PayPal makes a move for wearables payments
The company plans to launch the app in April, and Samsung’s Gear 2 and Gear 2 Neo will be the first wearables to host the app. The PayPal app will let consumers make mobile payments, store and utilize rewards and send money to other app users.
“Today, the mobile device isn’t just a smartphone or a tablet, it can be anything you bring with you – like a watch or a bracelet,” said Jennifer spokeswoman at PayPal, San Jose, CA. “PayPal’s vision is to provide consumers a seamless, frictionless payment experience and want to continue taking the friction out of mobile shopping, across any device the consumer chooses.
“We think wearable payments are another very innovative and interesting way to help remove friction from payments experience,” she said.
“The smartphone isn’t going away any time soon, but we’re always looking to bring a seamless, frictionless payments experience to our consumers in whatever form factor makes the most sense for them.”
PayPal debuted its new app via a YouTube video on Feb. 23. According to the video, the new app will be simple, safer and smart.
Consumers will be able to use the app on Samsung Gear 2 smart watches. They will be able to check-in to stores via the app, paying at the cashier via the watch.
The app will also enable consumers to redeem offers, as well as send and receive person-to-person payments. Additionally, consumers will be able to check their balance via the app and track activity and past payments.
PayPal has already enabled in-store and person-to-person payments via its smartphone app. Via the smartphone app, consumers can pay at the table at a restaurant whenever they are ready, order ahead so they do not have to wait in line and check-in and pay at a store.
These new updates came in September when PayPal launched a significant revamp of its app that features a stronger focus on consumer-friendly features such as mobile offers, order-ahead capabilities at thousands of locations and the ability to finance purchases (see story).
PayPal has been broadening its mobile commerce reach for a while now. For instance it recently partnered with ePay a prepaid payments processor that powers digital gift codes (see story).
The company also launched its own beacon device to compete with Apple’s iBeacon (see story).
Additionally, PayPal recently integrated a new biometric feature into Samsung’s Galaxy S5 to use fingerprint authentication for mobile payments with PayPal merchants.
This newest release from PayPal will bring the company into the next frontier, wearables.
“The idea of storing value on wearables makes a lot of sense,” said Drew Sievers, CEO of mFoundry at FIS Mobile, San Francisco. “There are fewer barriers to entry for the Wearable Wallet than there are for carrier-led mobile payments.
“It will take some time, but there will be millions of wearable wallets in the future,” he said. “Given PayPal’s historically digital focus, it seems like a natural play for them.”
While PayPal might be the first actual payments app for wearable devices, a number of players have been experimenting with this potential recently. For instance, Wallaby Financial, a company that helps consumers get the most out of their credit cards, just released an app for Google Glass and is planning to look into actual payments in the near future (see story).
While Google Glass may be the more buzzworthy wearable device, experts believe that devices such as rings and watches will make the most sense for payments since they will let consumers easily tap to pay without having to say any commands or pull anything out of their pocket.
Additionally, students at the University of Pennsylvania’s PennApps hackathon recently created an app for Google Glass that lets users make payments via Venmo.
“Wearables are a hot topic right now, and extending mobile payments into this space makes a lot of sense, especially if you add in location-based awareness and the ability of the app to distribute deals and store special offers,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston.
Mr. Kerr is not affiliated with PayPal. He commented based on his expertise on the subject.
“A hurdle for mobile wallet adoption is that it is not hard to pull out a credit card,” he said. “Payment capability in a smart watch means users do not even have to pull out their phone.
“It is very hard to leave your watch somewhere and, if this catches on, PayPal might be one step closer to cracking the code, regarding in-store mobile payments. If the app can help consumers to discover special deals and drive them in-store to redeem, this positions PayPal well to prove even more value for participating brands and retailers.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York