Wednesday, October 14, 2015

Watch the smart new way to pay

Banks in Russia have started providing, for a price, a watch which allows consumers to pay for purchases with one touch. Since the vast majority of the Russian people still prefer to make payments in cash, this new service must first overcome cultural and psychological barriers to expand and make an impact.




There is a smart new way Russian banks are offering customers to pay for what they buy. Alfa Bank started selling Austrian Watch2pay watches to clients from mid-July. They were soon followed by Centre-Invest, based in Rostov-on-Don. Gazprombank and AK Bars in Kazan introduced this ‘smart watch’ much earlier, in April 2013.

The watch has a built-in bank card, with MasterCard PayPass support to facilitate contactless payment. These watches can now only be used at 1,564 shops in Moscow, 610 in Kazan, just over 100 in St. Petersburg, and a few dozen in other major cities. The stores where the watch can be used are primarily supermarkets and fast food restaurants, such as McDonald’s and Subway. You can also pay the fare on some bus routes in Moscow and St. Petersburg.

According to the National Agency for Financial Studies (NAFI), however, more than half of Russia's population has never used non-cash means for payments, and 90 percent rely on cash for basic daily purchases.


Is there a future for PayPass?
“New payment technologies such as MasterCard PayPass attract the attention of the most progressive members of society – those who are interested in new gadgets, as well as banking specialists and technology enthusiasts,’’ said Eugeny Arnautov, the press officer for the electronic payments service, Yandex Money. “However, it is still not the most popular payment method among the general public.’’


The head of NAFI’s press office, Olga Lvovskaya, believes gadgets that support MasterCard PayPass could find their market primarily in the Russian Far East. According to NAFI’s data, Internet banking is used by 18 percent of the general Russian population, but that figure reaches 30 percent in the Far Eastern Federal District. Lvovskaya said residents there are more tech savvy due to their proximity to Asia.

According to analysts, contactless payment systems need several more years to become popular in Russia. Most likely they will be integrated with smartphones, while other gadgets won’t be able to enjoy the same success, Arnautov believes.

“Voice recognition, fingerprints, the eye retina and other biometrical data will be used for contactless payments in the future,” said Arnautov.  
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