Barclaycard is introducing bPay Loop, a small case comprising a contactless chip, so that wearable owners can transform their existing watches and fitness bands into vehicles for contactless payments, highlighting a new commerce opportunity.

The Loop case can be slid onto any consumer’s fitness band or watch buckle, enabling that individual to make contactless payments totaling £30 and under at 400,000 locations across Britain. The new device rollout comes on the heels of several financial marketers’ recent innovations within the wearable industry, suggesting that their popularity and potential has not yet hit its peak.

“There will never be a shortage of new ideas and ways to integrate NFC into various touch points with consumers and financial institutions will always want to be relevant, for obvious reasons, in that domain,” said Jon Squire, CEO and founder of CardFree. “The challenge is picking the winning UX/platform that allows for reasonable success and a beachhead that makes sense to defend.

“While bPay may be a low-risk way of testing some new experiences – given that the customer is on the hook to pay for the add-on – this will likely be just a step in testing the waters.”

Spotlight on wearables
Loop, which officially went on sale on July 7, is the fourth product to emerge from the bPay contactless payment group. It was developed to fill customers’ demand for a way to enable their already-owned wearables to make contactless payments.

Loop’s launch marks the first time a product in Britain has become widely available for individuals seeking to add payment functionality to their existing devices. Loop can be slid onto the strap of any fitness band or watch containing an open buckle, and can be used by any consumer with a Visa or MasterCard credit or debit card registered in Britain.

Users can add funds onto a digital wallet linked to Loop and use their wearables to make instant payments at NFC-enabled terminals in 400,000 locations across Britain.

The wallet and actual device can both be managed via the bPay mobile application or online Web portal.

Consumers will also receive the same fraud protection applied to contactless cards. If they happen to lose or misplace their wearable, they can remotely disable the device through the app or by going online.

Barclaycard will offer Loop to individuals buying select products from Swiss watch manufacturer Mondaine and fitness tracker brand Garmin during the month of July.

Loop can also be purchased from bPay’s Web site for £19.99.

Potential for disruption
A growing number of financial institutions are pairing wearable devices with contactless payment functionalities, signaling that this trend could catch fire in the next several months.

For instance, Visa hoped to drive a resurgence in interest for wearables by rolling out a payment ring allowing athletes at the Rio 2016 Olympic Games to make purchases by tapping the accessory against any NFC-compatible terminal (see story).

However, Barclaycard’s Loop may not possess the necessary wherewithal to make a significant splash in the commerce sector – partly due to the product’s extra cost.

“I wouldn’t count on this disrupting the mobile payments sector, and would doubt that someone as sophisticated as Barclaycard would be anticipating huge demand either,” Mr. Squire said. “We’ve seen in the U.S. with GO-Tag, and several other add-on devices, that distribution and interaction (e.g. live balances, offers and loyalty integration) are huge limitations to the success of these types of programs.

“There is an inherent assumption that the customer is willing to pay extra for this type of experience and the fact remains that even when this experience is ‘free’ in an embedded device like Apple Pay and Android Pay, adoption is still a hurdle – adding the friction of the customer shelling out money will limit this to a subset of those interested in mobile payments.”