Aşağıda yayınladığımız yazılar, Prof. Dr. Selim Yazıcı’nın Özyeğin Üniversitesi, Financial Engineering and Risk Management (FERM) Yüksek Lisans Programında vermiş olduğu Financial Technologies dersinde öğrencilerin bitirme ödevi olarak hazırladıkları çalışmalardan oluşmaktadır. Yazılar kendilerinden izin alınarak yayınlanmaktadır.

Is it wearable?

Hazırlayan: Naime Eriş

Does it pay my coffee?

Yes! Contactless payment coffee thermos was invented. 😊

This essay will inform you about the most talked financial technology –wearable payment systems- . You will read a little research about the historical development of the increasingly common wearable technology, the areas where it is used, its advantages and disadvantages.

A brief history of wearable technology

The portable technology is not new. Wearable technology is not new, either. For example ‘Walkman’ is the first widely wearable technology product. After Walkman, CD players became more popular because a tiny CD has had more songs than a tape cassette. This is one of the earliest examples that knowledge is growing and tangible technology is shrinking. It was a long way from floppy disk and CD to flash disk. Today, we can carry all the photos of our long life, all our documents, all our favorite musics in a minimal chip or in a mobile phone with us where we are. Today, smart wearable tech is being used in variety of applications –including personal and business computing, fitness tracking, navigation and healthcare monitoring. We can unlock the doors with a tiny Bluetooth keys, cards, moreover, on the other case we can unlock the doors with only our fingerprint.

What about wearable payment systems?

From history to today there were loads of payment tools, from bartering to coins, cashes and cheque books. Of course, in modern age, the first thing that comes into our mind is the credit card technology. The credit card first issued in 1854 by the Hotel Credit Letter Company for tourism purposes. In the modern sense, credit cards were issued for the first time in the United States in the early 20th century, to be given to elite customers engaged in oil or highly consistent trade. The credit card demand, which shrank in the 1929 great crisis, re-emerged in 1950 with the slogan ‘dine and sign’ by McNamara Diner Club. Actually, the story of the emergence of credit card is quite interesting. One day, Frank McNamara who is a lawyer in US invites a customer of him to dinner. However, when the account arrives, he notices that there is no money, and he has to pay the account by signing the back of the business card. After the diners card is very popular in the USA and Europe, American banks have started to operate in this area, too. ‘Bank Americard’ and the ‘American Express’ is the first examples of this. Then, Visa and Mastercard have emerged after the credit card spread widely at international markets. People loved it (and loves it now, too) because the credit cards provide an opportunity to spend now and pay later to people. The credit cards became an important part of us. Today’s new credit card technology ‘contactless credit cards’ is becoming widespread. Surveys show that in a few years there will be no more cash in many countries. In Turkey, for example, according to the Interbank Card Center (BKM) data, while the number of contactless payments increased by 2 times compared to the same period of the previous year, approximately 1 million contactless transactions per day took place in February 2019.

On the other hand, in the 1990s, the explosion of portable PCs mobilized the wearable technology concept, and mobile phones became the most preferred consumer device. But now the mobile phone is not only a cell phone which calls somebody or message to someone but also it is a payment instrument. We can do all your banking transactions with a basic banking application in our mobile phone. The QR code is the new mobile payment alternative. With QR codes come from your bank account, you can pay everything you want.

Although mobile phones and credit cards become inseparable parts of ours, people sometimes do not want to carry anything. Here it is, the wearable technologies come in to the scene. Wearable technology or wearable devices can do tasks just like a mobile phone or a computer. The wearable payment system is a booming market. Pebble Technology Corporation developed the first commercially successful smartwatch that paved the way for today’s Android and Apple smartwatch devices in 2012. The technology companies invest billions of dollars to them.

From watches, wristbands, clothing and jewelry to goggles, the popularity of wearable technology become more popular than mobile phones or credit cards contributing towards a potential impact in banking systems. Many people prefer contactless payment because of the fast service. Hence, banks have also started preparing for a wearable market, because the growth of banking using wearable devices will be faster than mobile and online banking. Wearable devices become a big revolution in IoT and will be more important in the coming years. In 2015, closed-loop payments accounted for 82% of wearable-device payments; a significant proportion of which were Disney World’s Magic Band and other closed-loop applications for specific theme parks, cruise ships, music festivals and so forth. According to ABI Research, global wearable device shipments are set to hit more than 500 million by 2021.

Whereas some people think that the wearable payment is suitable and easy, others claim that it is not suitable with their own arguments. Of course, the contactless payment system has both opportunities and challenges. We can list some of them as follows;

– The biggest advantage of wearable payment technology is that unlike traditional and cumbersome payment methods like cash money, credit cards and even physical wallets are easy. Shaking a wrist or touching a finger is much easier than removing your wallet, reading a credit card, or signing a receipt.

– Wearable technology is something that you always have on you,

– These products will save you a lot of time because it will allow you to do many jobs at the same time.

– You can save time with advanced voice detection systems instead of long texts and messages,

– Designed to be extremely fashionable and wear whatever you wear. There are even jewelry accessories, especially rings,

– One of the benefit is the integration. While you are jogging, you can carry your phone, your credit cards, the navigation and the healthcare monitoring etc. with a smart watch without a big bag.

– The wearable payment system is also important for the economies of the country. Because research shows that non-contact payments increase by 25%.

– In addition to all of them, the widespread use of contactless payment system in the coming years will reduce the cost of printing money by the central banks, sometimes even exceeding the real value of money, as it will reduce the habit of carrying people with cash.

– Of course, the first question comes to users’ mind is the security,

– The complex ecosystems it contains, and the implementation of ‘plug and play’ applications for open-loop use cases is a long process,

– Providing and verifying the payment account credentials underlying wearable devices,

– And of course, a suitable payment infrastructure should be available. This should be able to support a variety of technologies (barcodes, Wi-Fi, etc.) that help ensure that the availability of contactless EMV POS terminals is everywhere and that these terminals are available for payment,

– The special goggles we can use, the devices that detect the voice command, and even the cell phones will make our body and mind tired and new diseases will emerge,

– Life passing through tripping, seeing and examining will become ordinary. Because you will all of them with one click,

– It will become impossible to be unreachable,

– The privacy of private life will gradually decrease. (But this will become an ordinary, I think:)

To sum up,

Wearable technology continues to expand rapidly since the beginning of the 21st century. Foldable and non-perforated telephones, high-megapixel-equipped watches with flexible display, outstanding examples from the 2019 mobile world congress. The technologies that are produced, designed and continued to be developed still have the advantages as well as their disadvantages. Many wearable technology start-ups cannot be implemented in practice. To date, interesting and useful wearable technology devices, textiles and garments have been developed, but the gaps between laboratory and real-world applications have still not been filled.

The rapid progression of wearable payments creates additional challenges. New application factors are emerging and there are serious procedures in their management. Currently, there is very little clarity for the generated devices and the standards created for various payment ecosystems. For example, smart watches and jewelry manufacturers are replacing physical SIMs with downloaded credentials. In short, wearable technologies are the biggest problem for users, the problem of trust still continues. On the other hand, when all these problems and procedures are overcome, wearable technologies will have a profound impact on our lives and people will get used to easiness very quickly. This is definitely an inevitable and happy end.


Bibliography:

Wearable tech: a growing payment opportunity- Smart Payment Association

Wearable technology: Present and Future -Sopphi Wilson & Raechel M.Laing https://www.researchgate.net

https://www.mwcbarcelona.com/2019-highlights/

This paper was prepared as a class work for Financial Technology course given by Prof. Selim YAZICI at Ozyegin University, Graduate School of Business, Financial Engineering and Risk Management Program.

Bu giyilebilir mi?
İstanbul Üniversitesi, Siyasal Bilgiler Fakültesi, İşletme Bölümü öğretim üyesidir. Ayrıca, Marmara Üniversitesi, Bankacılık ve Sigortacılık Enstitüsü'nde, Sigortacılık Bölümü'nde 2009-2016 yılları arasında misafir öğretim üyesi olarak "E-Sigortacılık" dersini vermiştir. 2019 yılından beri misafir öğretim üyesi olarak Özyeğin Üniversitesi, Financial Engineering and Risk Management (FERM) Yüksek Lisans Programı'nda Financial Technologies dersini vermektedir. Teknolojiye ve teknolojinin yaratacağı fırsatlara inanmış bir akademisyen olarak, 2000'li yılların başında, teknolojideki değişimin finansal kuruluşların üretim, pazarlama, satış, dağıtım ve satış sonrası süreçlerinde yaratacağı etkileri ve e-ticaret olanaklarını değerlendiren araştırmalar yapmış ve sigortacılık sektörüne özel bir envanter oluşturmuştur. Bu çalışmaların sonuçlarını, ortak yazar olarak yer aldığı "Elektronik Sigortacılık" (2002) adlı kitabında yayınlamıştır. Daha sonra, finansal hizmetler dünyasındaki teknolojik değişimi ve müşterilerin dijitalleşmesini gözlemleyerek, özellikle bankacılık ve sigortacılık sektöründe dijital dönüşüme yönelik projeler geliştirmiştir. Teknolojinin finansal hizmetler sektöründe kullanımı ve çevik yapılar olan start-upların bu alandaki girişimcilik faaliyetlerini içeren FinTech ve InsurTech konuları ilgi alanını oluşturmaktadır. Girişimcilik, Finansal Teknolojiler, Dijital Sigortacılık, Proje Yönetimi, İş Sürekliliği Yönetimi, İşletme Yönetimi, Uluslararası İşletmecilik ve Örgütsel Davranış konularında dersler vermektedir. Finansal teknolojiler konusunda girişimcilerin ihtiyaç duyabileceği tüm alanları kapsayan ve ülkemizde ilk olarak FinTech İstanbul tarafından gerçekleştirilen "FinTech 101 Eğitim Programı"nın şekillenmesini sağlamıştır. Öğrenen Organizasyonlar (2001), Elektronik Sigortacılık (2002), E-Öğrenme (2004) ve İş Sürekliliği Yönetimi (2013) başlıklı yayınlanmış dört kitabı bulunmaktadır. TSEV ve TSPB'nin eğitmenlerinden olup bankalar ve sigorta şirketleri için çeşitli konularda eğitim programları düzenlemiştir.