If phones become wallets, can wearables be pocket change?

Samsung, terminal manufacturer Ingenico and Swiss app developer Smartlink are teaming up on an odd premise: Rather than treat wearables as vessels for a mobile wallet, treat those devices as a handful of bills and coins.

The use cases for such a system include consumers going for a run or a spa visit where having a phone is not otherwise necessary, but there is still a need to spend a few bucks on a bottle of water or other small items.

This concept led the tech companies to form the Contactless Companion Platform, which will launch its official pilot in countries across North America, Europe and Africa next month. The testing is expected to continue into September 2017.

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The companies built the CCP on the premise that Near Field Communication technology for contactless payments could be used to treat wearables as stored-value containers managed by an app. The platform would provide access to a small amount of money and for a limited time period.

The payments industry has often tested this model without considering it to be the end goal. Many early contactless and mobile payment pilots were limited to festivals, stadium events and short-term programs like the Olympics.

Indeed, the most successful implementations of mobile and wearable payments severely limit what users can do with their devices. The Starbucks app, responsible for a staggering 27% of the company's U.S. in-store sales, is essentially a digital version of the Starbucks stored-value card. Walt Disney Co.'s Magic Band bracelet is also a stored-value device that operates only within Disney theme parks, limiting its usefulness (other than as a fashion accessory) to the duration of a person's stay.

The CCP partnership, which also includes funds holder Cornercard and token service provider Carta Worldwide, is similarly designed to target specific use cases where wearables would benefit consumers without forcing them to change the broader payment habits. The companies demonstrated the service with various wearables during last week's Mobile World Congress in Barcelona.

"With CCP in place, you can make contactless payments via any enabled device of your choice, whether it is a smart card, wristband, key fob, watch or smart ring," Thomas Arenz, director at Samsung Semiconductor Europe, stated at the MWC in Barcelona.

"It offers full control of payment validity, location, time or day, and other parameters you decide on during the remote top-up of a secure token and the companion app on your smartphone."

Based on the Smartlink wallet server, the CCP has also positioned the service as an option for parents to manage a child's allowance or provide funds for a specific event such as a field trip.

The service will be managed via Apple and Android smartphones, including a feature that allows users to deactivate the wearable if it is lost.

Late last year, Samsung began mass production of a mobile application processor for wearable devices with full connectivity and LTE modem integration.

“Designed on our state-of-the-art process technology, this application offers great power savings, 4G LTE modem and full connectivity solution integration, as well as innovative packaging technology optimized for wearable devices," Ben K. Hur, vice president of system LSI marketing at Samsung Electronics, stated in a release at the time of the launch.

"It is a ground-breaking solution that will greatly accelerate wider adoption of wearable devices by overcoming limitations in current solutions such as energy usage and design flexibility,” Hur added.