Payment providers eye wearable trend
Tokenisation to help fuel smart cities
Leading global payment technology providers are gearing up to tap into mass transit payment and electronic shopping through tokenisation technology via mobile, smartwatches and the Internet of Things (IoT).
"In the next 2-5 years, electronic payment through contactless technology will play a role in mass transport, especially in large cities, enhancing efficiency for commuters as part of smart city initiatives," said Benjamin Gilbey, senior vice-president for digital payments and labs in Asia-Pacific for Mastercard.
Tokenisation will replace the 16-digit card, with more secure transactions via encryption technology through a wide array of devices such as smartphones and wearables.
The company has been partnering to implement the system in over 100 major cities like Singapore, Sydney, London and New York.
In London, the company is co-operating with Transport for London to use contactless payment, reducing the cost for the ticketing systems and labour from 12% to 6-7% of revenue. The systems are more convenient for commuters as they can use debit or credit cards to pay for tickets abroad without buying a local card or using local currency.
"We already piloted the new system in Singapore and expect to have a wider roll-out in the next quarter," he said.
Mr Gilbey said in the future, machine-to-machine or IoT payments will grow in popularity. He said cars will be able to make automatic payments for parking fees, for example, while washing machines can pay utility bills.
"Users will be able to employ voice features to make payments through Google Home and Alexa," he said.
Device-based payments through smartphones and mobile payment with Google Pay, Samsung Pay, Apply Pay, and smartwatches like Garmin and Fitbit will increase, said Mr Gilbey.
Donald Ong, country manager for Thailand and Myanmar, said Thailand is advanced in terms of electronic payments, in particular standard QR code payments for SMEs.
"Cash dominates at 85% of payments in the country, so there are a lot of opportunities here," he said, adding that includes the smart city initiative.
Mr Gibey said online shopping is another potential area for payments, as the new 3D-Secure industry 2.0 standard will ease digital commerce payments.
The new system is set to roll-out globally next year.
Meanwhile, at Bangkok Fintech Fair 2018, organised by the Bank of Thailand, Visa also demonstrated its mass transit payments and wearable devices through tokenisation technology under the EMV standard.
UnionPay provided a glimpse into future payments using Garmin, Huawei, Swatch and Tic wearable products.
Consumers can digitise their credit or debit cards for hands-free payment, allowing them to leave their plastic at home.
In China, wearable device-based payments are already being implemented.
"As Thailand is moving toward a cashless society, UnionPay International is working to develop and test more innovative e-payment solutions that are tailored to the needs of SMEs," said Wenhui Yang, general manager for Southeast Asia.