Interview with Terrie Smith, Digiseq on revolutionising the wearable and IoT market

Terrie Smith will be a keynote speaker at the upcoming European Women in Payments Network Annual Event, the only Pan- European Conference specifically focused on championing for diversity (gender/cultural/age/race etc) in FinTech & Payments. EWPN will be hosting the 2nd Annual Conference & Awards on 15th- 16th October 2018, in Amsterdam, featuring interactive panels, deep-dive workshops, and plenary sessions with industry female leaders.

What is your background in mobile payments and IoT and how did you come to launch Digiseq? What was the driving idea behind the company?

I was working in the Mastercard Global Product Team where my brief was to enable NFC payments onto mobile phones. There were many trials (and tribulations) and from piloting the concept it was obvious that the consumer would be wanting this capability. This was before the smartphone came to be and the consumer was not so familiar with using apps on a mobile, so at that time the consumer’s main concern was security – always the fear of the unknown. However, once the consumer had the experience and realized the potential of mobile payments, those fears quickly dropped to the bottom of the list.

Having established that the consumer would adopt the concept, the next hurdle was the technology. Still, this was at a time when the only way to deliver information to the phone was via the mobile network – and experience showed that the MNO and PNO do not enjoy sharing their revenues…. Now the problem was no longer technology, but commercial so it was important to find a way to deliver the capability to the consumer and meet all the needs of the parties involved, without those parties having to spend huge sums to deliver the solution. It was obvious that the PNO was positioned to minimize the costs for their issuing banks and deliver a solution to minimize their efforts - this was really the concept behind what we know as Tokenization today.

Tokenization was adopted by Apple Pay who were the biggest market driver to delivering mobile payments and who really set the trend. From my own personal perspective this was just a beginning in the belief that mobile payments will replace the card in your pocket (eventually), but this replacement leaves a big gap for convenience payment, and secures payments from a myriad of ‘intelligent’ devices that we now refer to as IoT.

What has the journey been like so far? What was the wearable environment before you started Digiseq, and how has this developed up until now?

The journey so far has been very exciting, nerve racking and encouraging… all at the same time!

Exciting because we have had the opportunity to ‘go back to basics’ and look at the world of payments from a consumer perspective rather than the bank perspective. We recognized the fundamental issues of scale: the bank is not a distributor, the consumer wants choice, and payment is not the only service. We realized that wearable payments would never scale if you rely upon the bank and payment provider processes to provide the wearable – fashion is a very emotive subject, as is brand and the consumer desire for choice.

Until Digiseq came on the scene, wearable choice was very limited by the processes implemented by the payment service providers – an element of square peg in a round hole. We understood some key factors for wearables: it is important to maintain the processes of the OEM and brand for manufacture and distribution, and not force the payment industry process onto them, plus offering the consumer choice and ease of delivery.

So with this in mind we set to and created a platform that enables a consumer to choose any wearable, any service such as Access Control, Loyalty, SecureID, and provision/personalise the wearable anywhere (over the internet) without the need for extensive security surrounding the location. This leads the way for a truly consumer centric service to enable scale.

Nerve racking – because we are at the bleeding edge where we are changing consumer behaviour – and consumers can be very unpredictable

Encouraging – so far the consumer has shown an enthusiastic uptake of wearables – particularly in the major cities where contactless payment is accepted on transit.

What is the state of wearables today? What are the biggest challenges for you currently?

The concept of wearables to the consumer has come a long way – I remember using a mobile phone for the first time and almost being run out of the shop – the reaction to wearables hasn’t been that drastic but it is still a bit of a leap for some consumers.

Today we are the technology behind the K Ring (aka Kerv), and Muchbetter.com keyfobs – with more brands including watches, keyrings, bracelets and bands who will be launched in the next 2 months.

A key issue to the use of wearables is naturally the acceptance environment – which is improving rapidly.

Another challenge we face is from the OEM/brand themselves – believing that the only option is a prepaid card because that’s all the existing bureau services can deliver. We are now partnering with the existing card bureaus to help them expand on their services – offering the OEM/brand more choice.

To minimize the OEM/brand effort Digiseq has grown from being a provisioning service (TSM) to an end to end service providing the OEM/brand a turnkey solution – taking on all the complexity of the payments ecosystem and presenting a one stop solution. The next challenge is to encourage the issuers to onboard to the tokenization services – it’s a bit chicken and egg – as the banks want to see there are sufficient wearables for their consumer to choose before they commit, and the OEM/brand wants to see that the payment service from many banks is available to be delivered to their device – it is a bit of an impasse at times but it is improving.

Wearables are still in its early stages in terms of adoption and integration; do you think adoption will increase in the coming years, and if so, on what scale will they be adopted?

Naturally we believe that the wearables industry will grow. According to Barclaycard’s Contactless Spending Index, the value of contactless payments using its bPay payments chip, which is embedded in items such as watches and jewellery, increased by 365% in 2017 compared with 2016 - and from the feedback we have from trials, especially of tokenization, then we believe the adoption by the consumer will be rapid. Once you have used a wearable for payment it’s hard to go back to a card (or a mobile) for those convenience purchases – having a wearable that is ‘always on’ gives the consumer confidence that they only need the wearable because there are no batteries to run out! The traditional watch manufacturers are also being offered a competitive lifeline to their digital rivals which is now pushing up the adoption.

Looking forward, how do you see the use of wearables develop in the coming years? How will the technology develop and what services will be incorporated?

We strongly believe that the use of wearable technology will be just the norm. The consumer will wear payment in the same way they wear clothes – they will have many wearables of different styles and will chose which one to wear according to the occasion.

The wearable will become an essential part of the consumer apparel. Each style will have services suitable for the occasion – I may wear my jewelled watch in the evening with payment only, my leather strap watch in the day with payment and access control for work and my silicon band in the pool for payment and locker access…..

Our base platform was designed to support multiple options and we believe the consumer should have ultimate control.

About Terrie Smith

Terrie is a creative technologist committed to innovation and delighting customers. A payments expert with a proven track record of product development and invention, she is named on several game-changing patents. Terrie was a Senior Manager of a global team and was instrumental in the delivery of the Mastercard solution that supports Apple Pay. In 2014 Terrie launched Digiseq where she serves as Chief Executive and is focused on revolutionising the Wearable and IoT market while enabling traditional manufacturers to deliver cutting edge functionality to their customers.

About Digiseq

Digiseq is an innovative global FinTech company providing a Trusted Service Management solution for Programme Managers, Issuers or NFC wearable manufacturers to enable payments on consumer devices. Digiseq developed a consumer centric solution that is efficient, secure and designed to provide scalable, cost effective provisioning of payment and other secure applications.