Wells Fargo is letting cardholders pay with their wrists.
On Thursday it began supporting FitBit Pay payments, which customers can use by waving their FitBit smartwatch, called the FitBit Ionic, at merchants whose payment terminals accept NFC.
Wells is the latest among a series of financial institutions to roll out wearable payments through FitBit. In September Bank of America made ATM access and contactless payments from FitPay wearable devices available to its credit and debit cardholders. ANZ, a major bank in Australia and New Zealand, followed last month. On Monday Dutch bankABN AMRO began testing “wearables as a payment method” with 500 current account customers. FitBit also counts American Express, Capital One, U.S. Bank, Royal Bank of Canada, UBS, Santander and Starling Bank among its supported cards.
Wearable payments could be a nice source of data and an extra security measure for banks, according a Deloitte report. Because of devices’ sensors, communication devices, servers and analytics engines, they don't just store payment information and authenticate users, they also collect data, couple location data with the wearers' previous spending habits to minimize the likelihood of a fraudulent transaction and can communicate, aggregate and analyze the data before allowing informed actions to take place.
It's the latest in a series of moves from Wells Fargo to roll out contactless banking options for its customers. In October it began rolling out contactless ATMs with the goal of making 13,000-ATMs fleet contactless by 2019. It's also a first mover in the contactless movement among U.S. banks, which are increasingly planning contactless card rollouts. Recent research projects that by 2021, 229.6 million contactless card shipments will be made to the U.S., dwarfing the 2018 projection of just 78.4 million.
NFC payments are not at the level they need to be, said Aite Group senior analyst Thad Peterson. But banks are still experimenting. Wearable payments could be a natural extension of contactless card payments, particularly as more merchants install NFC-enabled payment terminals at the point of sale to support mobile payments and digital wallets such as Apple Pay and Google Pay, for example.
"Why wouldn’t you just walk in and the store will have your card on file and recognizes your face or voice — it’s eliminated the idea that you have to tap your card and you can walk in and pay seamlessly and that’s where we’re going,” Forrester principal analyst Brendan Miller told Tearsheet.
But banks still don't know when they'll take off, especially since consumers still haven't fully adopted tap-to-pay mobile payments and still pull out their plastic cards. In the U.S., customer adoption of contactless payments lags behind markets like the U.K., Australia and Canada, where “riding the contactless wave” has been a defining slogan for payment modernization.
2018 may not be the year contactless payments go mainstream in the U.S., given the success of contactless payments in other markets, more institutions rolling out connected-device payment capabilities, and and more aggressive marketing from institutions, momentum is building around contactless, Peterson added. Others note that as the traditional retail checkout gets phased out, consumers will likely follow suit.
Tanaya Macheel contributed reporting.
2018 may not be the year contactless payments go mainstream in the U.S., given the success of contactless payments in other markets, more institutions rolling out connected-device payment capabilities, and and more aggressive marketing from institutions, momentum is building around contactless, Peterson added. Others note that as the traditional retail checkout gets phased out, consumers will likely follow suit.
Tanaya Macheel contributed reporting.