The future of payments is wearable, and it’s already here

Bionym links wristband with Mastercard

The Bionym Nymi wristband

The Bionym Nymi wristband authenticates your digital identity by detecting your heartbeat. (Bionym)

Mobile payments are just starting to gain traction in the consumer world, but they’re already behind the curve. Toronto tech firm Bionym today announced a pilot project in association with MasterCard and the Royal Bank of Canada (RBC) that will turn its Nymi wearable into a payment device.

Canadians already use cash for only 10% of their transactions. The vast majority of that non-cash activity is composed of credit and debit cards, and tap-to-pay cards and point of sale (POS) terminals are already in widespread use in Canada. That makes Toronto the perfect test case for Bionym’s undertaking, because the Nymi will use the same near-field communications (NFC) technology in currently-available contactless payment options.

MasterCard’s involvement in a recent $14 million funding round was an early indicator that Bionym was considering the payment space. The pilot will be limited to existing MasterCard account holders, and unlike the much-hyped Apple Pay-enabled Apple Watch, will not require users to have a paired mobile device on hand.

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Bionym CEO Karl Martin hopes the project will change the way consumers think about wearable payments. “Success is people saying they want to pay this way,” he says. “Given all the options, they should want to be wearing something for this purpose because they have a higher level of trust and find it convenient.”

Martin believes the Nymi adds the missing security piece to the virtual payments puzzle. The Nymi establishes identity using a wearer’s pulse, making it harder to fool or forge than a PIN or password. “When you make payments in physical locations using your credit card, all you’re doing is providing credentials that tie you to the account you’re making a payment from,” he notes. “We provide a connection of trust, because the person is wearing a biometric authentication device.”

Martin discussed the company’s pilot project.

Canadian Business: How big do you think the market for wearable payment is? 

Karl Martin: Payments itself is massive. We’re doing this pilot in Toronto, where people have already gotten comfortable with contactless payments and what we’re hearing is that they love it. The market is huge, and our goal is to ensure that contactless payments are not a peripheral idea for low-value transactions, that you could use it for every transaction in a physical location because we provide a higher level of trust, even more secure than the chip-and-pin.

Does getting involved with transactions change anything for Bionym from a financial liability-perspective?

We’re already doing lots of things that I would consider very high-value, even though they might not be directly connected to payments and dollars. By managing a person’s access to their devices and their accounts—including perhaps bank accounts—we’re already in a space where there has to be high-level security and trust. So we don’t see this as a huge leap from the things we’re doing around device access.

We also look at it in comparison to what’s already out there. What’s out there already is the tap-and-pay, which has no authentication. So in the case of contactless payments where somebody else uses your card, the onus is on you to notice that your card is gone, and then deactivate it. What we’re trying to do is build a higher level of trust, so that in the long term you can reduce fees and make contactless payment a more trusted transaction. Compared to what’s out there today, we’re certainly offering a higher level of security or trust.

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Convenience is a consistent reason cited for wearable payments, but they also seems to remove some of the convenience of cash. I can give someone money to buy me coffee…

There’s no question that by changing the way we do things so significantly, you could possibly lose some of the features of other forms of payment. But at the end of the day, you do have to look at this in terms of cost-benefits. What are the kinds of things you do most often with your money? Most often you’re using it at a store. Personally I’ve started to go cashless over the last six months or so because I realized that despite whatever added benefit cash has, in terms of being able to use it anywhere, I just couldn’t be bothered to carry cash everywhere.

Overall the benefits are much greater, and whatever costs there might be, like for example the flexibility of transferring cash to other people, those just cause new innovation. My belief is that ultimately we will go towards a cashless society, and then there will just be more and more transactions to enable all possible kinds of transactions, including peer-to-peer. You’re already seeing some of this liberation with Square, which enables anybody to collect credit card payments. I think that’s the direction we’re going to go.

JOIN: Sign up for the Nymi contactless payment pilot project »