Wearable banking: NFC-enabled rings and other devices from VISA

18 August 2016

What about wearing your payment card on a finger instead of your wallet? Visa, a major card brand and a payment processor, has developed a new contactless method of making payments using the NFC protocols. The innovative Visa payment ring ensures much faster purchases – all that you need to do is to tap your gadget at any supported POS terminal to validate the transaction.

VISA Ring: Exterior and Interior

Will you marry me…?” and he put a Visa ring on her finger, offering her to share his life – and his money”.

Wearable bankingThe new contactless payment gadget unveiled by Visa looks like any other classic ring, but instead of a precious stone it includes an Near Field Communication antenna and a micro chip made by Gemalto. The Visa ring is made of black/white ceramic material – any other decorative metal would cause unreasonable interference in the use of the antenna. At present, there are 20 different ring sizes to choose from.

The Visa ring has been designed for active use – it is water-resistant up to 50 meters, so you can’t accidentally damage it when you are washing your hands. Plus, it doesn’t need charging because it works through conductive power from contactless terminals. That gives the Visa ring an advantage over such mobile payment platforms as Apple Pay  – your smartphone must be constantly charged to work properly.

Since rings have an irritating tendency to get lost, Visa offers a special smartphone application allowing users to disable their wearable device remotely. It is expected that the application will also show the list of all or latest purchases made with the use of the ring, so you can control your expenses.

Wearable Banking: What Else to Wear

Besides the ring, the company has also launched a contactless payment bracelet that operates like a contactless prepaid card held within a rubbery wristband. Currently, Visa works with several partners: in Spain, the Visa bracelets were launched by CaixaBank, in Brazil – by Bradesco. Wirecard and Visa Europe offered limited-edition contactless bracletes for the 2016 Eurovision Song Contest in Stockholm, Sweden.

The sweat- and water-resistant Visa payment wristband works on a basis of a prepaid system and allows making payments with a simple tap of the wrist. As with classic contactless cards, all purchases over R$50 in Brazil and 20 EUR in Spain require a PIN confirmation to authorize the transaction. Currently, the bracelet comes with no monthly or annual fee.

In addition, Visa offers one more high-potential wearable gadget to replace your regular payment card – the Swatch Bellamy watch created in collaboration with Swatch. The new “pay-by-the-wrist” gadget featuring a small NFC chip under the dial can be bought at Rio Olympics and throughout Brazil for US$95.

Tokenization and Field Communication Technology

The idea behind the new Visa wearables isn’t completely novel. The Near-Field Communication (NFC) technology is familiar for many people who have used Apple Pay. Visa continues to develop this concept, offering NFC-enabled payment rings, wristbands and watches working the same way, minus Touch ID (and fingerprint authentication).

If you need to make a payment, just bring your gadget to any NFC-compatible reader to establish communication and tap the accessory to confirm the transaction. According to the first ring testers, the device works best when you hold it at a 90° angle above the POS terminal. If everything is ok, you will hear a “beep” sound confirming that your payment has been successfully processed.

To add extra level of protection to the wearables and prevent data theft, Visa also uses a tokenization method that they call the Visa Token Service. It allows replacing your card number and other valuable information with a special token – a unique set of digitals that will be used for transactions. So if your precious ring falls into the wrong hands, it will be practically worthless because your sensitive data is effectively protected.

All payments made using the wearables are processed without exposing any sensitive data to the merchant. During the authorization request, the acquirer receives just the token and redirects it to Visa to complete the purchase. The token is translated back into a card number only in the payment network. And since you don’t need to show your payment card to the seller, the risks of data theft are minimal.

2016 Olympic Games: Testing Ground

Currently, the Visa ring is just a pilot project and cannot be bought at stores. Visa expects to attract attention to the new wearables during the 2016 Summer Olympics in Rio. The company offered athletes and partners to use the new payment rings and the Pulseira Bradesco Visa bracelets to make payments in the city. In case of success, the company will bring the new devices to mass market.

Major payment card brands are always searching for new ways to retain existing and attract new users. However, dethroning payment cards is a difficult task, even though wearable devices are more secure and easier-to-use. Surveys show that mobile payments account for only a small fraction of all in-store transactions in the U.S. It may take years to install NFC-enabled scanners at all merchant locations and convince people to wear their payment cards on a finger or wrist.

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