A wristwatch in the United Kingdom can do a lot more for its owner than provide an accurate time, if it happens to be a new watch2pay model that can complete contactless payments.
Laks GmbH and Vincento Payment Solutions Ltd. have developed the watch2Pay wristwatch, which carries a SIM-sized contactless chip that supports prepaid MasterCard PayPass transactions, the companies announced Dec. 7.
Consumers may use the watch to complete transactions up to £15 (US$23.45 or 17.50 euros) by waving it near a contactless payment terminal, the companies stated.
Vienna, Austria-based Laks manufactures the watches and manages the prepaid watch2pay program, while London-based Vincento issues the cards as a MasterCard scheme member.
Under an introductory program, watch2pay users are limited to loading £1,500 into the prepaid account weekly, but registered users can load £3,000 weekly, Zoltan Kaman, president and CEO of Watch2Pay LLC, a Florida-based subsidiary of Laks, tells PaymentsSource.
PayPass establishes the £15 limit per purchase, but in the U.S. the limit is $100, Kaman explains.
However, MasterCard uses a “soft limit” in some countries, meaning the consumer can make a contactless purchase up to a certain amount and pay the rest by “tapping and entering your PIN code,” Kaman says. “This way you are even able to pay for a car with your watch” in certain countries, he adds.
Other European financial institutions, such as Garanti Bank in Turkey, Volksbank/Bank Zachodni in Poland and Takarekbank in Hungary already provide the watch to customers interested in the prepaid program, Kaman says.
The companies developing the watch2pay program offer the watch to financial institutions as a way to promote client acquisition and to merchants to provide the additional potential for a closed-loop prepaid program, Kaman says.
A watch2pay wristwatch specifically designed for a closed-loop program has become a popular option for special events, Kaman adds. The Sziget Festival in Budapest, Hungary, offered the watch2pay “event watch” that allowed festival goers to load funds into the watch account and use it the entire week of the festival at any of the 1,400 point-of-sale registers installed at bars, coffee shops, restaurants and retailers, Kaman says.
Exxon Mobile Corp. also tested the use of its Speedpass contactless service in a Timex watch. It stopped offering the watch in 2005 to address other marketing opportunities (
Banks issuing the watch2pay wristwatches also provide a standard-size MasterCard PayPass prepaid card, the Laks website explains. The card, which provides contactless or chip-and-PIN payment, is valid for two years and carries no setup or monthly fees, according to the site.
Consumers using watch2pay commonly load funds into their card accounts through wire transfers, direct deposit or cash, but Laks offers all loading options, including through the use of other debit or credit cards, Kaman says.
London-based Ukash, a subsidiary of SmartVoucher Ltd., offers watch2pay users the option of loading funds into their watch2pay card accounts with Ukash vouchers, which they can purchase with cash at more than 70,000 retail outlets or through the Ukash website, the e-commerce company noted in a press release.
The watch has an “integrated antenna” around its casing, which communicates information from the computer chip with the PayPass reader at the payment registers, Kaman notes. The watch chip is not visible once inserted, he adds.
Watch2pay could make a U.S. debut near the end of March, after Laks establishes business partners for the product, Kaman says.
“The licenses we have in the United Kingdom and Poland cannot be used in the U.S., and there is no single bank identification number sponsor that has all of the licenses issuing a PayPass card,” he says.
More than 400,000 terminals with readers worldwide accept watch2pay payments, and watch2pay users could use the additional standard MasterCard PayPass card at any merchant accepting MasterCard because it also supports mag-stripe transactions, Kaman says.
Kaman did not disclose if, or how much, participating banks pay for the Laks watches used in the watch2pay program or if Laks receives a percentage of each transaction completed with the watch.
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