There has been a sustained clamor about fast-rising industries – IoT, and digital currencies – which is worth it. Now, a new technology PayTech is rising right beyond our noses might be the next big thing we’ve ignored for too long.
The term ‘PayTech of Things’ primarily came into the media scene in 2018 and has since grown modestly popular in use. A fancy name for fancy tech, it is not much of internet or an interacting network like that Internet of Things serves to be.
Regardless, the ‘PayTech of Things’ is apt and has been posited to grow into an industry worth hundreds of billions of dollars in a year. If you are having trouble believing, then you would find it interesting that Tony Craddock was the one to snap up the domain ‘paytechofthings.com’ before anyone else did. That it hasn’t been snapped up much earlier is even perhaps a more curious matter.
PayTech is just as it sounds: Payment technology. However, the new raving ‘PayTech of things’ follows the extraordinary increase in the release of diverse wearable with seamlessly integrated technology to make contactless payments.
Thus, payment technology is fast infiltrating the world of smart and casual wear, a growth that wouldn’t be too shocking given the convenient tech involved. We are at an age where many of our sci-fi dreams are very much now practically realizable, and it is only time that we not only use tech but wear it too. Consume it. Eat it.
Perhaps, the latter is an obvious exaggeration; it, however, paints the current ‘technological-scenario’ well. More technological niches and industries are going to materialize in the future and develop into billion-dollar valuations as well. But for now, we have startups and companies that are fast taking to pioneering the burgeoning niche.
Companies Pioneering PayTech
One of them is Thyngs. Based in Norwich, the startup managed to secure £300,000 in seed funding on equity crowdfunding platform Crowdcube in early 2018. Thyngs novel approach to solving ease of payments without using mobile applications while still using mobile technology is one to look out for.
Mobile payment technology has stalled at a ‘peak’ in its growth and use for some years now, with the need for application installations reigning chiefly among its constraints. Thyngs has attracted close to 300 investors and set the pace for other startups prepared to stake their claim in an industry predicted to hit over 200 billion dollars by 2021. With confirmed relationships with bigger tech companies – Apple, PayPal, and Stripe – the potential of the nascent industry couldn’t be stronger.
What is PayTech of Things? It is the answer to seamless contactless payment, made easy with everyday interactions: wearables, eatables, etc. One of the earliest manifestations of the latter would be the genius pulled by the Lucozade bottle in 2017, which featured an NFC chip that allowed a free ride on transport to London. That was two years ago, and the growth of contactless payments has not slowed down. If anything, bigger companies such as Apple and Samsung are taking it by the horns.
PayTech of Things is also less fancifully known as wearable technology, except the device involved is not necessarily wearable, as seen from Lucozade’s masterclass marketing promotion. It could range from a smart watch to a cup. Suresh Vaghjiani, Managing Director at award-winning issuer processor Global Processing Services (GPS) explained it in simple terms:
“It’s simply the ability to make any object into a payment device,” he said. “From a reusable coffee cup to your key ring. Transforming an object that is part of your daily lifestyle and providing added convenience by giving that object the possibility to make payments! You would not consider them wearables, so the term is to encapsulate that anything could become a payment device.”
The Competition Isn’t as Silent as You Think
In 2017, eMarketer posited 21.2 million Americans to be users of wearables. Now in 2019, the number is closing towards 30 million. In a few years’ time, the nature of increase is expected to be exponential. It is no surprise that Samsung, Apple, Visa, and other big tech companies are at the front seat of the latest wearable tech on the market.
Apple’s smartwatch might be the most familiar of wearable techs in the United States, but elsewhere, Samsung is laying claim to the market too with the Samsung Gear S3 fronting Samsung Pay platform alongside their mobile phones.
For a while now, Visa has been experimenting with launching glasses capable of making contactless payments, as they recognize ease and security are what customers want. Other wearables that the PayTech company has also tried include keys, rings, phones, and wristbands.
Challenges to Global Adoption
The nascent industry has its fair share of constraints and limitations, especially at the time of writing. With time, technological developments would pave the way for lesser risks and improved performance.
Apart from regular constraints such as battery power, and price, the recurring issue of security proves to be the major barrier to wider acceptation. Fraud cases have not been uncommon with not only wearable payment tech, but with contactless payments in general.
Ease of payment is important, with ‘ease’ itself driving thousands of technological innovations over the years. But to many, the security of their accounts is a far more serious business. It explains why many would go through an almost tasking exercise of setting up Bitcoin wallets and getting cold storage wallets at the same time. People want to know their money is safe. And sometimes, that is all that matters.
As with many contactless payments, an avenue that allows electronic payment without verification as much as a pin can be exploited by fraudsters. While contactless payments only make about 1.1% of credit card frauds in a year, the percentage is nevertheless significant.
In 2017, for example, the total valuation of contactless frauds totaled £7m alone, triple the valuation for the previous year. The matter is, of course, over-exaggerated, though, as there are arguments that a contactless payment should be safer than existing means given; it uses tokenization to validate transactions.
For now, PayTech of Things is here to stay. And its growth has never been more imminent.