As technology gets more complex, the process of making a payment must remain simple, says Ryan Anderson, vice president of product at The Members Group (TMG).
The vendor's innovation lab is keeping this philosophy in mind when it designs payment applications for new products like Google Glass, a glasses-like wearable computer that has attracted attention from payment companies of all sizes.
"Today paying with cash and plastic is not painful; the next generation of payment methods will have to be incredibly simple and wearables offer that level of simplicity," Anderson says.
The innovation lab, which was launched 11 months ago, is "where we work on products that our outside the normal product development life cycle," Anderson says. "Our financial institution [and non-FI] clients expect us to help them navigate through the changing payment landscape."
Its Google Glass app, called See2Pay, relies on the Dwolla payment network. It uses geolocation to notify users when they're near a Dwolla-accepting merchant. The user can then pay with Dwolla by tapping out commands on the Google Glass headset.
The merchant's point of sale terminal displays a notification that payment has been made, and the consumer receives an emailed receipt.
TMG tested See2Pay in a closed-loop beta in Des Moines, Iowa for about three months, says Anderson. "The [Dwolla] network was chosen because it is a very prominent and successful peer-to-peer network," he says.
Both TMG and Dwolla are based in Des Moines. TMG was part of a group of investors that put $1 million into Dwolla in 2010.
Several companies, including MasterCard, Intuit and LevelUp have been experimenting with and actively building payment apps on Google Glass. And RedBottle Design LLC and Eaze have built Google Glass apps allowing consumers to make purchases with Bitcoin.
Google is also testing a way to use Google Wallet on the wearable headset through voice commands.
And other companies are building payments capabilities into other types of wearable computing devices, including smartwatches and smart rings.
"The research we had read on consumer spend in the wearable space shocked us," Anderson says. According to a report from Juniper Research, consumers will spend $19 billion on wearables in 2018, compared to a little over $1 billion in 2013. (Google Glass headsets cost $1,500 each, and its Android Wear smartwatches start at $200).
TMG has put the See2Pay code on GitHub, a code-sharing site, in an effort to encourage open source development. The group is not looking to make money from its Google Glass app, says Anderson.
With only 14,000 people who own Google Glass, "we are just excited to lay the foundation for this payment method," he says.
Two other projects are currently incubating in the innovation lab. One is an automated analytic tool for credit unions and the other combines mobile banking and payment functionality, says Anderson. The pilot for the analytics tool will wrap up in 30 days, after which the product will be introduced to TMG's clients, he says.