In 2014, FitPay’s founders, who all have backgrounds in payments and financial services, were frustrated with the pace of mobile payment adoption. They felt that mobile payments were lagging and wanted to bring a sense of excitement to the mobile payments scene. So, in 2015, they developed a “smartstrap” to enable NFC payments on Pebble Time smartwatches.
“Consumers were complaining about the experience with a mobile device, and our whole idea was to bring a different payment experience to a different set of devices, wearables,” said Michael Orlando, CEO of FitPay.
Two years later, however, mobile and contactless payments remain slow to ignite in the U.S., says Orlando, but FitPay now has a new platform that is opening up contactless payments for any device manufacturer. The technology will allow users to pay with a wearable anywhere they happen to be as long as there is EMV capability. The platform will launch commercially this November.
According to Orlando: “We have a bunch of folks ready to bring products to market at the end of this year and in early 2017.”
FitPay was launched in 2014 by Michael and Chris Orlando and Scott Stevelinck. For the first year, the tech startup was funded by angel investors, but in Feb. 2016, the company received seed funding of $3.1 million from Giesecke & Devrient (G&D).
What Has Been Difficult For FitPay?
The lack of contactless payments ubiquity, Orlando says, has made it harder for FitPay to get traction since the lack of universal acceptance leaves consumers confused. Orlando thinks that, if consumers can use a device all the time, they will be more inclined to assume a new habit.
He’d like for FitPay to be part of that habit-forming experience.
Orlando says that FitPay’s strength is its agnostic platform, which can run on any device’s operating system. Moreover, Orlando states that many of FitPay’s traditional competitors can cost more and take longer to deploy.
Another hurdle for FitPay has been getting manufacturers to understand that the capabilities of the devices are there and that only minor additions to the hardware and software are needed. Then, getting the timing right to get into product release queues to bring enough products to market.
FitPay had a bit of a learning curve on that score.
According to Orlando: “We were probably a bit early in what we were doing and understanding that, for hardware manufacturers, making a smartwatch or a fitness band is an 18-month development cycle from conception to market. Getting into those queues with them created a bit of a lag. But now that we’ve caught that momentum, we are seeing a lot of traction — not only for us but also interest in other devices coming to market that have our capabilities built in.”
But Does FitPay Foresee Slow Adoption In Wearables As With Mobile Payments?
According to Orlando, the earlier adoption of mobile payments in the U.K. and China, for example, was a result of already established contactless technology and infrastructure in the marketplace, mostly forced by chip-and-PIN. This has been missing in the U.S.
Orlando is banking on the adoption rate accelerating in the U.S. following the EMV liability shift that has put into fast forward the rush to swap out mag stripe terminals for ones that also have the capability of enabling contactless.
“When the two pieces are put together, this will help drive the adoption of contactless and mobile payments,” Orlando said.
Those are still two pretty big puzzle pieces to put together. Just having EMV terminals doesn’t automatically mean NFC is a switch that merchants automatically flip on, and some small SMB segments still need to be convinced that the EMV juice is worth the squeeze. Consumers and merchants also need to be convinced that tap-and-go is better than other cloud-based alternatives and plunk down the money to buy the FitPay-enabled wearables.
Still, it will be interesting to see what effect the new wearables — due out later in 2016 and early in 2017 — will have on the mobile and contactless payments scene. Watch this space, or “watch this watch,” as it were!