18 May 2018
More and more Europeans are ready to pay using wearable devices
On the one hand, the spread of smartphones, wearable devices, and the Internet of Things, and on the other hand the development of mobile payment solutions and applications that are increasingly safe and reliable and above all usable: the innovation at the level of apps, mobile devices and mobile payments is impacting on the business models of the retail and banking world precisely because they are changing the habits of consumers who use these devices for business and pleasure.
One-fourth of Europeans ready for wearables
A recent study conducted by Mastercard in collaboration with GCT Research reveals that about one in four European citizens, for a total of about 175 million people, is ready to use contactless payments, anytime and anywhere, for purchases on the go through smartwatch, bracelets, rings and other wearable devices enabled.
This finding testifies to the different consideration that users are having towards wearable devices, which until now had been relegated to simple and secondary functions such as, for example, step counting and heart rate measurement. Thus, thanks also to the rapid spread of contactless payment technology, these devices are on the way to becoming a real mass product in a short time. In fact, thanks in particular to the high level of security they are able to offer, in addition to the simplicity and the speed of use, the demand for these products in Europe has recorded an increase of 22% year on year in the period January-June 2017.
The Italian market split gives back the image of a country perfectly in line with the EU average, with contactless payments that have increased by 171% in the last 12 months, and a strong opening to payments via wearable devices, although this technology being available in our country only recently. In fact, the research shows that in 2017, 25% of Italians said they were already interested in trying wearable devices and accessories for in-store payments. Among Europeans, Italian consumers are those who have the least difficulty in making payments via mobile devices and most of them state that they own at least one device with NFC technology. In fact, in Italy there was an increase in the propensity to purchase with smartphones of 8% in the last year and the spread of mobile devices enabled to payments increased by 20%.
Confidence in contactless payment technology
According to research, the growth of the wearable device market goes hand in hand with consumer confidence in contactless payment technology, which has grown by 145% in terms of number of transactions in Europe. As for the main concerns, the study shows that the risk of fraud decreased by 24% in the last year, with the Netherlands (-41%), Spain (-33%) and the United Kingdom (-31%) at the top of the ranking of the markets where the degree of concern is lower.
An example of a wearable payment in Italy is represented by Letspay: launched by Unipol Banca, Visa and Nexi, it is a bracelet that uses a chip and a virtual card connected to a Visa debit card in order to pay directly at the cash desk. At the time of payment, the amount is entered on the keyboard of the shopkeeper’s POS. The bracelet is approached to the contactless reader, and acoustic and light signals will indicate that the operation has been performed. Under the 25 euros of expenditure you do not need to type the PIN, as for contactless cards, and the receipt is issued only on explicit request. Above that amount, it will be necessary to dial the secret number and the receipt will be issued automatically.
Biometric technology as favorite authorization method
Overcoming the concerns related to frauds can be explained by the numerous innovations we have seen recently. Among these, in particular, the use of biometrics, considered with increasing favour by users when it comes to authorizing a payment, for example, through a mobile device, or to giving the green light to a withdrawal from an ATM.
Going down in the field of technologies available for this purpose, biometrics offers different solutions. The oldest and most widespread is the fingerprint recognition, which identifies the key features of the fingerprint and translates them into unique codes for each user. Iris scanning is the method currently recognized as the most reliable for verifying a user’s identity: even in this case, the acquisition of the detailed representation of the coloured portion of the eye results in a unique code for each user. Moreover, unlike in the past, the system no longer requires the adoption of specialized hardware, simplifying and increasing its adoption. Voice recognition is used in all those situations where a remote authentication is required. The sensors “read” the vocal impressions and rhythms, also unique to each individual and, therefore, impossible to counterfeit. However, voice authentication is often used in combination with other systems. Face recognition, on the other hand, is widely used not only as an unlocking tool for mobile devices, but also at ATMs to identify users. It is a system that is considered less effective than others, since it can be influenced by external factors such as light, facial orientation or other elements. The hand recognition is a method developed for about twenty years and is based on the measurement of physical characteristics of the hand and fingers, such as length, width, thickness and surface. Finally, venous recognition: like the fingerprint, even the vein pattern is unique to each individual and therefore the method is considered highly safe. Detection can occur on the palm of the hand, on the finger or on the eye. In addition to being innovative, vascular biometrics is considered to be highly safe compared to other biometric technologies.
Best protection of identity
At equensWorldline we are working on biometric multimodal & behaviour, to add analysis on background to all sensors of phone to authenticate the cardholder and to mix biometric solution to have the best of breed.
Thanks to the agreement signed with Visa, Samsung has recently launched its digital wallet service in Italy: Samsung Pay. By using the Visa Token Service, Visa account holders can use compatible Samsung smartphones to easily make purchases all over the world. The developed platform allows you to add your credit and debit cards to the Samsung Pay portfolio and to pay conveniently and securely in any store that accepts Visa debit or credit cards that carry out banking transactions with UniCredit, Nexi and Intesa Sanpaolo. In addition to the security level embedded in Samsung Pay, through Samsung Knox and the biometric verification, the innovative token technology developed by Visa makes mobile payments more practical and secure by replacing payment card data with a unique digital ID. If the phone is compromised or stolen, the token cannot be used in any other environment and can be easily disabled without requiring the cancellation of the Visa account.