Royal Bank bets on wearable payment tech

Would you wear your credit card on your wrist?

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TORONTO – You’ve heard of paying retailers with the tap of a smartphone, but Royal Bank thinks shoppers are ready to take another big step: wearing payment options on their wrist.

The bank has paired with Toronto-based technology developer Bionym to test a wristband called Nymi (pronounced Nim-ee), which identifies owners through their unique heartbeat and then lets them charge purchases to their credit card.

The device looks like a watch, and will soon grace the wrists of 250 RBC clients and staff under a pilot project in Toronto that runs through February.

Eventually, the bank hopes to roll out its RBC PayBand across the country.

Royal Bank (TSX:RY) is focusing more on payment technology in an effort introduce more options, said Jeremy Bornstein, head of the bank’s payments innovation operations.

“We’ve been keenly looking at the wearable space for quite some time,” he said in a recent phone interview from the Money 2020 financial innovation convention in Las Vegas.

“We’re quickly going to move past (the test period) to giving clients true choice — not only in what they pay with — but also how they’re paying.”

For now, the Nymi band will only work with MasterCard, though eventually the Royal Bank hopes to allow debit transactions.

The technology offers a higher level of encryption that will appeal to more than just the banking industry.

The wristband has sensors that are programmed to recognize the unique electrical signals emitted by the user’s heart, also called an electrocardiogram. Without the heartbeat identifier the Nymi band shuts down, making it useless it someone steals the device and tries to access your account

Bionym sees the product catching on as a unique identification device that would work as an alternative to keys for your automobile, the password for your computer and a way to check in to your hotel room.

Royal Bank expects the popularity of mobile payment options to rise in the next few years as more Canadians ditch physical currency in favour of digital wallets.

Several products are in various test stages at the bank, including a higher standard of encryption technology for credit card payments that uniquely identifies every transaction on a credit card — rather than just the uniquely marking the credit card itself — in an effort to block complex forms of fraud.

The bank is also working on a service that would create a digital home base on your smartphone for debit and credit cards, as well as giftcards from popular retailers. The goal is to eliminate the plastic in your wallet and migrate those giftcards in your drawers at home, Bornstein said.

Royal Bank also partnered with wireless carrier Bell Mobility in January to test smartphone tap payments and plans to draw more attention to the technology next year.

“It’s not broad enough yet to bring out the billboards,” Bornstein said.

One of the challenges is that older models of BlackBerry and Apple’s iPhone are not advanced enough to support tap payments, which he said means bringing it to the masses has been difficult.

“We’re not able to deliver this to anyone with a smartphone, and so we’re working on that,” he added.

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