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Why carry your money when you can wear it?

Tina Orem

August 7, 2014

One of the most memorable episodes of the TV series “Seinfeld” involves character George Costanza and his wallet, which is wildly overstuffed with receipts and useless items such as Irish currency and Sweet 'n Low packets.

“It doesn't matter if it's more comfortable, it's wrong!” he protests after his friends chide him about the size of the wallet and tell him to get rid of some of the contents. “Important things go in a case. You got a skull for your brain, a plastic sleeve for your comb…and a wallet for your money! I need everything in there!” he yells.

They say that in every joke there is truth, which is why so many of us can identify with George's dilemma. The hassle of the overstuffed wallet is part of the motivation behind the growing popularity of wearable payment devices.Click to email me

Fitness fanatics will tell you that wearable technology is already the new “thing.” Fitbit, Jawbone and the Nike FuelBand, for example, are popular wrist devices that track physical activity, sleep time, calories burned and other data. The devices usually communicate wirelessly with a phone or other device, and therein lies the magic that is driving developers into wearable payment technology. After all, why carry it when you can wear it?

Technology such as Google's Android Wear, which is a streamlined version of Android mobile OS, is already out and is designed for use in wearable devices. Android Wear's job is to help Android phones talk to LG, Motorola or Samsung smart watches, and it has become just one platform for developers to create new payment-transaction solutions that let users pay for things without digging out wallets or having to click around on smartphones.

The Pebble smartwatch, made by Pebble Technology, is one example. It works with “thousands of apps,” both from the Apple App Store and Google Play, that users can customize. Users download the Pebble smartphone app to their phones, link it to any credit or debit card, and then use the watch to scan the vendors' in-store QR codes in order to pay. The service is available in Boston, Philadelphia, New York, San Francisco, Chicago, San Diego, Atlanta and Seattle.

Devices such as Pebble largely rely on near-field communications (NFC), which is a short-range, high-frequency wireless communication technology commonly used in contactless cards and mobile phones.

PayPal, meanwhile, is piloting a payment app for the Samsung Galaxy Gear 2 smartwatch. It allows users to view their balances and recent transactions, get payment notifications, view and save offers and check in at local stores, all using their watches.

Apps such as LevelUp also work with these devices, meaning that users can complete purchases with just a few taps or swipes on a smartwatch rather than having to sift through a stack of plastic cards.

Of course, watches aren't the only wearable devices that can make payments. The Nymi Smartwallet, for example, is a bracelet with an electrocardiogram (ECG) sensor. Every person's ECG is unique, so the wristband also authenticates (as long as you're alive — if you are a zombie, it won't work.)

ECG technology eliminates the need for passwords, and the company has released a Bitcoin wallet app that works with the device. That means users can pay Bitcoin-accepting merchants using just their bracelet/wristband and their beating hearts (for authentication).

Less zombie-proof is the bPay band from Barclays. This wristband has a chip that links to a prepaid account. Customers add money from a Visa or MasterCard debit or credit card and then use the band to make contactless payments of up to 20 pounds with participating vendors. (Unfortunately, the service is only available in the UK.)

It all seems so futuristic, but contactless payments aren't as wildly advanced as they seem.

Consider the lowly toll road pass hanging in many American cars. Every time cars come near the toll booths, the tolls are “paid” and the owners' balances are reduced accordingly — without the driver having to stop at the toll booth, fumble through his or her belongings, and produce a toll pass or money.

The next step is to take that toll-road application and move it from cars to people. And unless you're George Costanza, that could mean unloading that fat wallet from your pocket.