Mobile payments industry observers have focused most of their attention on smartphones with near field communications technology. However, an Austrian company has dreamed up a way for prepaid debit card users to avoid reaching for their pockets altogether.
LAKS' new Watch2Pay product embeds a contactless EMV chip inside a black fashion wristwatch, enabling the wearer to wave their wrist at any point-of-sale terminal that accepts MasterCard PayPass. The package includes a full-size, companion debit card so the wearer can use the same account with magnetic stripe readers that haven't yet been updated for contactless payments.
Watch includes fee-free, reloadable MasterCard
LAKS sells the watch and registers the prepaid debit cards for customers in the United Kingdom and Poland from its website, Watch2Pay.com. The company partnered with prepaid MasterCard issuer Kalixa for account management. Kalixa accounts offer free cash reloading at Barclays Bank locations across the UK, with no international transaction fee.
The product suggests a growing market for alternatives to traditional plastic credit cards. Some consumers and security experts have expressed fears that criminals could bump their own contactless readers against victims' pockets or purses to gain partial account information. Wearing a contactless credit card on the wrist can minimize that risk, while offering a convenient alternative to carrying a wallet.
Contactless credit cards in other unusual places
The Watch2Pay isn't the first experiment with alternative MasterCard PayPass devices. MasterCard previously issued pre-paid contactless payment wristbands to concertgoers at the Isle of Wight Music Festival. Although similar to typical disposable concert wristbands, MasterCard's solution enabled festival merchants to charge attendees' prepaid debit cards for concessions and souvenirs.
Likewise, Visa has started issuing PayWave key fobs through some of its partner banks. The devices resemble the keyless entry modules from newer automobiles, but carry the same "wave and pay" functionality as full-size Visa credit cards. Visa has given merchants a 2015 deadline to install PayWave-capable point of sale devices, or risk absorbing the costs of unverified, fraudulent transactions.