Fitness fans often turn to connected athletic devices to measure the calories they have burned, track heart rate goals and log the number of miles, steps and active minutes they’ve logged in a day. Now, these IoT products are helping users maintain healthy financial lives, too.
The past month saw notable connected fitness wearable manufacturers take their first steps (or jogs) into the payment space. In late August, for example, Garmin unveiled its new smartwatch, the Garmin vívoactive 3, which features integrated Garmin Pay, a NFC-based program enabling fitness users to make payments at the point-of-sale through their connected smartwatches.
But, if wearable fitness device manufacturers add payment capabilities to their smartwatches, will users be inclined to use them to make payments? Based on PYMNTS’ analysis of mobile wallet adoption, usage of mobile wallet services from major providers — like Apple, Samsung and Android — has so far been sluggish. In fact, Apple Pay, one of the first mobile wallets on the market, saw its usage drop below its 2015 peak of 5.9 percent in the most recent quarter, according to PYMNTS’ latest quarterly findings.
Based on said findings, it appears consumers have yet to get excited about mobile wallet solutions. Additional research suggests an opportunity to get consumers pumped up about adopting mobile wallets could lie in providing a payment assist through connected fitness devices, though. According to the most recent “How We Will Pay Survey” — a collaboration between PYMNTS and Visa that asked nearly 2,600 consumers about their connected device usage — wearable users are 45 percent more likely to make purchases online, and 66 percent would use a connected device to make purchases if it meant a more frictionless shopping experience.
Fitness tracking device manufacturer Fitbit is helping its users achieve better workout results by offering them the ability to make payments using the same connected products that track their exercise results. The company’s new smartwatch, the Ionic, just went on sale and allows users to make contactless payments in addition to tracking users’ health and fitness data.
For more on how adding payment capabilities could shake up the everyday workout routine, PYMNTS spoke with Lindsay Cook, Fitbit’s head of devices, about how the company’s new payments feature could open the door to an increase in mobile payment transactions — and lead to new partnerships between the connected device manufacturer and global banks.
Helping pay for stuff while working out, carrying light
In addition to offering users ways to manage and track their fitness goals and store music, the Ionic also enables users to make payments using the company’s own mobile wallet service, Fitbit Pay. Users can input eligible American Express, Mastercard and Visa payment card information into their Fitbit app, then use the Ionic to make contactless payments at accepting NFC-enabled payment terminals. The feature uses tokenization services to secure the transactions.
The Fitbit Ionic offers several features to help users focus on their workout routines, Cook said. These include a built-in workout coach that can evaluate and analyze a user’s performance, GPS features to track real-time pace and distance, automatic pause options for when a user takes a break to grab a drink of water and sensors to track heart rate and more accurately measure how many calories were burned during a routine.
The additional benefit of adding payments to the smartwatch, Cook said, is that it frees the consumer from having to carry a smartphone or other payment option like a wallet, cash or payment card during their workout. Ionic customers can use the device to quickly purchase a smoothie or energy drink from a vendor at a gym or can stop at a store during a jog without having to rummage around for a payment method.
“Having [the] ability to make a payment, just at the flick of wrist, is an unbelievably convenient experience,” she said.
Freedom from wallets, smartphone?
According to recent research, carrying a payment option around during a workout or exercise routine can be a pain point for many fitness fans. In fact, carrying payment options can be downright unpleasant, in some cases.
The “Visa Sweaty Money Survey” recently asked approximately 1,000 adults about their workout issues related to payments. The survey found nearly half of respondents (49 percent) want to make a purchase before or after their workouts, but are unable to do so because they do not carry a form of payment. The survey also found 57 percent of respondents do not carry a form of payment because they worry about losing it or have no place to hold it while exercising.
For those who do carry payment methods during fitness activities, storing those items can be, well, awkward. The survey found 57 percent of respondents who carry a payment option have resorted to storing their smartphone, cash or payment cards in uncomfortable locales — including in underwear or a bra — while they are exercising.
The survey also found 60 percent of respondents expressed an interest in using a wearable device to make payments while working out. By putting payment capabilities into a device that also tracks fitness goals, Cook said, the company is looking to help users focus on their exercise without worrying about what to do with their payment options.
“We’re giving consumers the opportunity to go to a gym, grab a bottle of water or grab a smoothie, and be able to leave and use the Fitbit Ionic [to pay] without having to carry their smartphone,” Cook said.
An added benefit could also be curtailing the use of sweat-soaked cash.
Mixing health and wealth
The Ionic became the first Fitbit product to offer payment capabilities, and Cook said the company will explore the possibility of bringing the technology to additional products.
She also noted that adding payment capabilities to its product offerings does more than offer users a more convenient option for making payments. Cook said the development opens new avenues and opportunities for Fitbit to venture into the banking space.
Cook said the company has plans to launch its Fitbit Pay mobile wallet through several global banks to reach a broader customer base. The company has designs on partnering with banks in the U.S., Canada, Australia, the U.K., Singapore, Taiwan and Ireland, among other countries, with the aim of reaching 1 billion customers worldwide in 25 global markets by 2018.
The partnerships with so many banks mean these financial institutions (FIs) can use the Fitbit API to offer Fitbit Pay to their own customers, Cook said. This allows banks to offer their own reward and loyalty programs to their customers for using Fitbit products. As an example, Cook noted that Fitbit is partnering with AIA Vitality, a wellness program in Singapore, which offers customers a subscription bundling service using Fitbit’s API to reward customers with cashback deals and discounts for meeting their fitness goals.
Partnerships like this, Cook said, could allow Fitbit to offer consumers new options to manage both their physical and financial health.
“This is one of several opportunities we’re looking at to combine the personal power of health and wealth together, and develop some really interesting insights, experiences and programs by partnering with banks,” Cook said.
A new opportunity for mobile wallets?
Expanding into global markets could also lead to greater adoption of mobile wallets as a payment option. According to a recent report from Ireland-based market research firm Research and Markets, digital payment methods are the top form of payment for eCommerce sales globally. In China, the largest online retail market, mobile wallet options are used for approximately 50 percent of all eCommerce sales.
Introducing the mobile wallet as a payment option on the wearable devices of health-conscious users could help the payment option grow further, Cook noted.
“It adds a whole other level of convenience that will change the experience, and gives us the opportunity to grow on traction in places where mobile payments haven’t seen as much opportunity,” she said.
In other words, in addition to helping users stay connected to their personal health and workout data — and offering them a more convenient way to carry payments around during exercise routines — bringing payment capabilities to wearable fitness devices could also provide an opening for mobile wallets to get on track and gain greater acceptance.
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