Fitbit has long been the big name in wearable fitness trackers, and now it looks like the company wants to have a part in mobile contactless payments, just like Apple Pay. The company just announced it purchased Coin and could start including NFC-based payment options in its products as early as 2017.
Cha-ching! Fitbit buys Coin
Coin started several years ago as a Kickstarter project that promised to consolidate our credit and debit card collections into a single device. It was the same size and shape as a regular credit card, and users could switch between cards with the tap of a button thanks to Coin's ability to reprogram its own magnetic stripe on the fly.
The company later developed technology that let its combo card device work with tap-to-pay POS readers. Coin managed to sell 250,000 units, but never took off in a big way. That translated into an opportunity for Fitbit who said in a statement,
While there are no plans to integrate Coin's wearable payments technology into the 2016 Fitbit product roadmap, the acquisition accelerates Fitbit's ability to develop an active NFC payment solution that could be embedded into future Fitbit devices, broadening its smart capabilities.
Translation: Soon you'll be able to buy a Fitbit you can wave over a credit card reader instead of pulling out your wallet.
Contactless payments is the big thing thanks to Apple Pay, which was introduced with the iPhone 6. The technology wasn't new, but until it came to the iPhone, consumers and retailers didn't show much interest. Many Android OS-based smartphones offer similar contactless payment features, and Samsung has its own version, too. Now Fitbit will be joining the retail payment party, too.
Adding Coin's payment technology to Fitbit will compete with Apple Pay from a mindshare perspective, but from a technology standpoint, they aren't the same—something Dave Hamilton pointed out on TMO's Daily Observations podcast. Coin merely replicated the tap-to-pay technology already built into many credit and debit cards and doesn't require any transaction backend support from the company. Apple Pay, however, is a complete transaction system that requires back end tech from Apple, support from banks, and support from retailers.
Snapping up Coin was a smart move because it helps Fitbit stay relevant in a market where smartwatches like Apple Watch are gaining traction, and serve many of the health and fitness functions previously dominated by devices such as Fitbit's One, Surge, and Flex products. This is probably the best possible outcome for Coin because it couldn't gain a real foothold against NFC-enabled smartphones.
For Fitbit users hoping the company will finally support HealthKit, get ready for disappointment. Fitbit made it clear early on it wasn't interested in participating in Apple's fitness tracking platform, and buying Coin only helps reinforce that wall.