Ai Editorial: Wearable Tech - good for payments for travel?

What would it take to facilitate transactions via wearable tech devices?

Airlines are trying to make the most of wearable computing. Ai’s Ritesh Gupta assesses what would it take to develop apps for smartwatches that are ready to facilitate transactions

How can wearable tech devices be tapped for revenue generation?

The travel sector responded swiftly to the launch of Apple Watch with a spate of tailored apps, but a lot more is being expected from wearable computing.

The promise of augmenting the overall payment experience, propelled by data pulled together by smartwatches, (such as location and behavioral information) is luring. The past six months or so have been quite exciting, even though battery life remains one of the major drawbacks of these devices.  

Today there is talk of an option, bPay band, in the UK to wear a contactless wristband, add money from debit or credit card and then avail contactless payments, up to £20 wherever one comes across the contactless symbol.  

As the travel industry digs deeper to ascertain what can be done in this arena, it is clear that the immediate attention is on smartwatches, especially with the unveiling of Apple Watch. The device features contactless payments and integration with Apple Pay for the user account. This can be used for payments independently of the airline.

Coming to grips with reality

Talking of “in the moment” technology,  Kevin O’Shaughnessy, CEO, Indigo, says the day-of-travel content is key here. He refers to security fast-track passes, gate upgrades, ground transport - all fitting the bill.

Using geo-fencing, itineraries and other data sources can build these to a value-added experience that add great consumer value, says O’Shaughnessy, who spoke at the Ancillary Merchandising Conference, a part of 2nd Annual Mega Event Asia-Pacific (previously held in Singapore, 31st Aug 2015 – 2nd September 2015). 

Comparing existing platforms with the new wearable e-commerce segment, O’Shaughnessy says there are new limitations that need to be handled. “Instead of vast or curated choices, we must predict specific product needs: a new application for big data. Also, where once customers would browse, (it should be noted that) small screens support “triggered” purchases.”

Explaining in detail, O’Shaughnessy says, “If you track the evolution of interactive devices from desktop web to mobile to wearable, we are facing one of the biggest interaction design challenges than we’ve seen before. We have learned that the larger the screen, the easier it is to browse and to comparison-shop. Wearable interactive devices takes this to an extreme: we’re literally down to “quick yes/ no decisions”. This means that the retail opportunity needs to be heavily targeted and contextually relevant.

“To date, airlines have focused on “wearable boarding cards” which is a pity — it has created a new “palm-reading gesture” which we now have to learn (O’Shaughnessy refers to an example - placing your wrist the wrong way around on a barcode scanner). We think the retail opportunity is much more exciting than this,” he says.

What can work and what can’t

He points out that the travel timeline is well-modelled and relatively finite, in spite of some internal complexity.

“We all have a solid understanding of “planning, booking, pre-departure, day-of-travel...”. Taking this into finer detail will expose natural purchase occasions which we can capitalize on. For example, booking an unknown hotel on mobile won’t work, however, booking your local Sheraton or a familiar hotel would. The key differentiator is trust and advance knowledge. Wearable ecommerce doesn’t have time for a new tab, extensive searching and browsing and an elaborate review of TripAdvisor reviews - the 5-dot score is a good idea however.” 

“The examples we see working in the short-term are actionable notifications (class upgrades moments before departure), security line passes (popular in Europe), ground transport (disclosure: Indigo is a GT provider), some onboard purchases, some push offers in the airport, room service and so on,” he says.

Trials in progress

O’Shaughnessy says the trialling of concepts such as contactless wristband is a positive development.

“The rule for any innovation like this, I suppose, is that when you think of a transaction, there are two parties involved. Both must evolve at the same speed,” he says. The average wallet now contains a bunch of “contactless” cards, every one of which can be used for access control, payment, loyalty and more, as long as there is some expression of consent from the holder and, if necessary, people on the other side of the counter start working together.

“The real innovation in wristbands is that it removes the last barrier to adoption for payments — its more easily used than the card lost at the bottom of a handbag or pocket. If added to a smart device, such as Pebble, Android Wear or Apple Watch, there may be some more consumer value which can evolve over time,” says O’Shaughnessy. “Current payment cards - stuff from your corner bank, issued by Visa, Mastercard etc. - can easily be upgraded to securely carry documents such as boarding cards which passengers could use at the boarding gate. It doesn't necessarily have to be on your wrist. In my view, this isn’t a step change, but it's nice to see the payment guys innovating.”

Facilitating transactions

So how challenging is to develop apps for smartwatches that are ready to facilitate transactions?

O’Shaughnessy says the same can be summarized into three key points

• No checkout and strictly yes/ no decisions: “Searching” and “Form filling” is the current interaction metaphor of ecommerce and online shopping carts — whether Amazon or airline. There are no forms that you can fill out from a watch. This means that any retailer has to, effectively, guess what a customer will require in advance of presenting a triggered sale (via notification). “Think Personal Shopper, not Bazaar,” says O’Shaughnessy.

• User accounts and Pre-clearance for Terms and Conditions: Users cannot read and accept terms and conditions as part of the checkout process; this implies a pre-existing relationship with the user (they have signed up to your service beforehand).

• Payment: No credit card details, no secure code/ verified by visa/ CVV checks. Payment details must be ready and on standby for that spur of the moment decision.

These create an imperative to create rich, deeply-integrated ecommerce experiences. The good news is that this effort can improve retail across all devices too, says O’Shaughnessy.

He says by focusing on the three key challenges, the solutions are actually closer to ecommerce platforms than device capability. “There are about five competing platforms for smart devices today across two major smartphone platforms. They are not compatible, but the differences required to support, for example, Pebble and Apple Watch are trivial in comparison to the changes required in the backoffice to support both,” he points out. 

The imperative for airlines is to choose carefully when to engage with the customer; the offer must be highly focused and relevant and to distill this into a snap “yes/no” decision. Bear in mind, any watch interactions are interruptions — you only have half a second of attention.

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