Sports wearables company Garmin has tied up with payment processors Visa and Mastercard to enable NFC payments on their Vivoactive 3 smartwatch. The payments will be processed through Garmin Pay, a NFC-based product which will use both Visa and Mastercard’s tokenization services.
Users will be asked to enter card information in the Garmin mobile app (available in Apple and Android app stores) by scanning a card or manually entering their information. Once the cardholder’s details are validated and the app has synced with the smartwatch, the card is available for use through the device.
Garmin’s announcement comes on the heels of rival Fitbit’s partnership with Mastercard. Fitbit’s newly launched Ionic device will also have NFC payments as well.
Note that both Visa and Mastercard have programmes for pushing payments on Internet of Things (IoT) devices via NFC. MasterCard has a programme called Commerce For Every Device launched in 2015, where wearables and fashion accessories could be converted into a payment device as a foray into IoT payments. While Visa has a programme called Visa ready. Recently, Visa expanded its IOT programme where companies can act as a token service provider (TSP) and will have to adhere to a standards-based approach for IoT payments. For Garmin, it partnered with Fit Pay as its TSP.
Tokenization is a security technology that replaces cardholder information, such as account numbers and expiration dates, with a unique digital identifier that can be used for payment without exposing a cardholder’s more sensitive account information. Through this, Visa can link a card to devices such as appliances, car key fobs or wearables with a token, which can be used for payments.
IoT Payments in India
Meanwhile, in India, connected device payments got a heartbeat in 2016. GOQii’s new fitness tracker will allow NFC payments through Axis Bank. However, it is necessary for users to have an account on Axis Bank for the feature to work, and it will be available in over 1 lakh merchant establishments across the country.
Earlier in 2015, HDFC Bank and ICICI Bank launched mobile banking apps for the Apple watch and smartwatches running on the Android system. But both the applications had very limited number of transactions which they could do and were very cumbersome and did not have a proper acceptance network.