Visa and MasterCard want you to pay with the shirt on your back

Keep your wallet in your pocket: you can now not only pay with your phone, but with a swipe of your shirt, your handbag, or even with your car.

That’s how Visa and MasterCard believe we want to shop in the future, unveiling plans to embed payment systems into the most unlikely objects.

The Visa Ready programme lets partners embed retail abilities into any device with an internet connection. MasterCard launched a developer programme for wearables with mobile payments firm Coin, and is working with WISeKey to embed payments into luxury watches. In partnership with Samsung, it’s also planning to build payments into devices such as smart appliances, letting your fridge restock groceries.

The Visa system will first focus on wearables and cars, with Honda planning a one-click payment system via an in-car app. It will detect how much fuel you need, pay for it, and even use vouchers or collect loyalty points. Honda intends to support a range of “technical solutions”, including Bluetooth LE and Wi-Fi to connect to pumps. “Depending on the solution selected by the fuel partner, the vehicle may need the related technology added to the vehicle,” a spokesperson said. Even old cars may be retrofitted to support the system.

But it’s easier to add a wireless access point to a car than your shirt – not least because the hardware must survive the wash. Most smart clothing systems currently house the hardware in a “puck” that can be removed before washing, such as OMsignal’s Biometric Smartwear. This has a “little black box” that clips into each shirt, connecting the waterproof sensors in the fabric to your phone via Bluetooth. Others, including CuteCircuit, have built hardware into waterproof housing. 

Including payments in existing systems isn’t a technological leap – security is the main hurdle, which Visa and MasterCard will address via token systems, identifying payees with a unique code rather than handing over account details.

Convincing consumers to use it is another challenge, said Jacob Morgan, an analyst at Forrester Research. “The biggest problem with any of these systems is that you have to change people’s habits,” he told Alphr, adding that card payment systems will be hard to replace. “Moving to contactless [cards] was a challenge; moving to contactless clothing is another layer on top of that, quite literally.”

A killer app could help spark a shift to embedded payments, but Morgan doesn’t see any contenders. The usual example is fitness gear, but most people carry their phone with them on a run for tracking or music, making it a better option for payments. iPhone owners can pay for their morning coffees and train tickets with a wave of their NFC-enabled handsets, and a system from Android Pay was due to arrive in the UK in March. 

Research from Deloitte suggested 5% of phones with NFC were used to make retail payments at least once a month by the end of 2015, up from 0.5% the year before. But extending that to your watch or shirt may prove less popular with consumers. A study by GfK suggested that 45% of people polled see making in-store purchases via a wearable as “silly”.

Such tech may remain limited not only because of customer apathy, but also retailer reluctance – Deloitte said a “minority of merchants” support contactless phone payments, and that’s likely to continue as the new payment terminals can be expensive. 

Banks and retailers are testing the water, however. Barclays offers UK customers a “bPay” wristband, key fob or even sticker, while Spain’s CaixaBank gave contactless wristbands to 15,000 customers to test payments under €20, ensuring security by alerting users to any transactions. The same payment technology from Gemalto has been used at Saracens rugby matches. 

“Devices are getting smarter and more connected, [which] makes them capable of being used for payments but also can lower the barrier to entry for new companies to join the market and disrupt the established players,” said Jack Kent, analyst with IHS iSuppli, noting electronic wallets could mean consumers try different payment methods such as Bitcoin. “Visa and MasterCard have to invest in new forms of payments to help prevent such disruption.”

The big change may not be paying with your sleeve, but that the account isn’t with one of the big players. “Companies will fight to make sure their card is the preferred option,” Kent added.