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PayPal tries fingerprinting to cement smart watch-triggered sales

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April 14, 2014

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PayPal’s smart watch app

As Apple is slowly easing its way into fingerprinting, PayPal is going in big with the form of payment technology by enabling commerce from devices strapped to consumers’ wrists.

PayPal has debuted its smart watch app for Samsung’s Gear Fit and Gear 2 watches with fingerprinting technology that cuts down the number of steps required to buy something. The app is the newest example of how the eBay-owned company is moving beyond smartphones and tablets to keep the momentum around mobile payments going.

“By using the fingerprint authentication capabilities on the new Samsung Galaxy S5, PayPal is making it easier to shop on mobile devices,” said Kathy Chui, spokeswoman at PayPal, San Jose, CA.

“Nobody likes having to remember and type a complicated password, especially on a tiny keypad,” she said.

Pay by swipe
PayPal’s smart watch ambitions were originally announced in February with the planned launch of the smart watch app (see story).

Now, the app is live in eight markets — the United States, Germany, Hong Kong, Mexico, Britain, Brazil, Canada and Australia.

The app lets consumers check-in at stores, save offers and checkout by swiping a finger across the screen. The swipe logs a consumer into their PayPal account that is linked to a credit card.

Additionally, consumers can receive person-to-person payments via the smart watch app.

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PayPal’s app

PayPal cites a sponsored study with the National Cyber Security Alliance to rationalize its move to fingerprinting. According to the study, 53 percent of Americans are comfortable swapping out a traditional password for a fingerprint authentication.

PayPal’s parent company, eBay, is also testing a commerce-enabled app for Samsung Galaxy Gear devices (see story).

At the same time, both companies are also embracing other types of new technology to improve the retail experience, including shoppable pieces of glass and digital kiosks at retailers such as Kate Spade, Rebecca Minkhoff and Sony (see story).

Seamless shopping
Apple’s launch of iOS7 last year with fingerprinting technology made a big splash in the industry as a possible indication of the manufacturing giant’s mobile commerce plans.

However, Apple appears to be taking its fingerprinting initiatives slowly and has not opened up fingerprinting scanning for third-party apps yet.

Both Samsung and PayPal are known for jumping into innovation faster than Apple, but it remains to be seen how receptive consumers will be towards paying for items via their smart watch.

At the same time, the trend towards streamlining mobile payments shows no sign of slowing down.

“I think the broad trend in payments is to simplify the authentication process without sacrificing security simultaneously,” said Nitesh Patel, London-based senior analyst for wireless media strategies at Strategy Analytics.

With both Apple and Samsung integrating fingerprint scanning onto devices the option for payment service providers to simplify payment authentication is certainly increasing, whatever the device,” he said.

“Certainly, the limited real estate of some wearable form-factors, for example, watches makes fingerprint authentication more practical than entering a long pin or password.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York

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