Swedish Bank Moves towards Wearable Payment Technology

Wearable Payment Technology

Customers have been employed to tapping and financing with credit or debit cards for years, eliminating the need to register their cards into a supplier’s card reader and keypunch in their PIN.

Usually, such activities are limited to low amounts of capital to prevent serious issues. This special in the case of the bank – should cards be utilized for unauthorized activities, either intentionally or inadvertently.

As with any latest banking technology, initial take-up was delayed due to perceived risks on the segment of customers, with some personalities buying metal containers or cases to act as Faraday cages to check their cards being read by malicious items.

The original risk has remained small, and tap-and-pay systems are now widespread for low-value properties. They’re quick and convenient, and the level of fraud and perversion has been low.

The sensible next step – at least from the banks’ viewpoint – is to do away with the card altogether for such activities. From a technical point of view, there is nothing in a contactless credit or debit card that cannot be replicated in some other tool, one that’s more practical and convenient to utilize.

The more comfortable it is to make payments, the more successes are likely to use this kind of payment method, which equates to more significant business benefit for the bank and also faster throughput for markets in which such payment is accepted.

It takes much more long-drawn for someone to switch their card from their wallet or purse than to set their hand over a payment reader, so more flexible payment is suitable for the customer and the market or organization concerned.

Two financial institutions in Sweden have lately taken such a step by giving their customers the option to utilize wearable technology to make low-value adjustments. If tap-and-pay by card is more active than Chip and PIN, a tap-and-pay watch or other item of apparel should be even quicker.

The two banks involved are Swedbank and Nordea, the latter being the most comprehensive bank in the Nordic region. Both are utilizing Fidesmo Pay for their innovative methods of payment. Fidesmo specializes in contactless services in cards or wearables.

Both Swedbank and Nordea are providing their customers a Mastercard debit card the option of “tokenizing” the map and combining it to the wearable device. This means that any contactless transaction performed with the wearable device is debited from their Mastercard account, so the wearable does not need a new account but is simply a different way of entering an existing one.

Mattias Eld, CEO at Fidesmo, stated, “By this collaboration, a considerable part of private customers with Mastercard debit cards on the Swedish business will now gain access to exercise Fidesmo.”

Meanwhile, Erik Zingmark, head of transaction banking at Nordea, stated, “We always endeavor to provide our customers in Nordea with the liberty to choose their favored digital solution. We are consequently entertained to have this collaboration with Fidesmo as their goods provide convenient payment clarification and make banking easier for our consumers.”

If one is thinking that customers may balk at replacing a supremely good watch with one that they can utilize to make contactless payments, Fidesmo has already thought of that, as watch bands can be equipped with the new technology – so there’s no obligation to get rid of the existing Tag Heuer, Rolex, Swatch, Timex, Casio, or Apple Watch to take advantage of the latest payment paradigm.

Instead, a Swedbank or Nordea customer can substitute its strap with a new one from Nordic fashion brands before-mentioned as TRIWA, and then make purchases while holding the ability to tell the time and look fashionable. If customers do want a totally new watch, the Fidesmo Pay payment technology is developed into analog watches accessible from Ur & Penn and BERG.