Health IT

Fintech meets wearables: Untapped business opportunity or another way to get ripped off?

The company just raised $3.1 million in seed funding from Giesecke & Devrient, a mobile security supplier to banks, mobile network operators, and original equipment manufacturers.

Fit Pay screengrabAlthough all kinds of businesses use mobile phones as a way to reach customers with their app services because they are so damn pervasive, there are times when we might just want to leave them behind like during a fitness workout. A new company wants to support that behavior by providing payment technology support for wearables.

FitPay is basically consumer wellness meets financial technology or fintech. Its website boasts that it can digitize and personalize credit cards “to a secure element on your device” so users can make transactions at millions of retail locations.

Part of FitPay’s approach involves validating a customer’s identity. It claims to handle secure authentication and prevents data breaches when the wearable is lost or stolen. Its technology platform uses Near Field Communication technology, combined with card network tokenization to interact with point-of-sale terminals at retail locations, according to a company statement. Personal data and card information is fully encrypted, the company claims.

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The company just raised $3.1 million in seed funding from strategic investor Giesecke & Devrient, a mobile security supplier to banks, mobile network operators, and original equipment manufacturers. Plug and Play Tech Center also participated in the seed round — FitPay took part in its FinTech Accelerator last fall.

The cofounders of FitPay are fintech industry veterans. CTO Scott Stevelinck was previously Chief Technical Architect at Visa where he managed a merchant-facing platform for more than 500,000 global merchants. He was also a senior solutions architect at SGI. Michael Orlando, the CEO, previously worked as chief sales and revenue officer for Jumio, a next-generation payments and ID software-as-a-service company. He also worked as senior vice president in global sales and services for CyberSource — a security company that VISA acquired in 2010.

Given the ongoing debate about the level of protection fitness tracking companies provide their own customers’ fitness data, it’s a little curious that companies would want to add to that risk with financial data. But it will be interesting to see what the uptake for FitPay’s approach is. A perfect opportunity will be its Kickstarter campaign scheduled to start February 8. The crowdfunding campaign will seek to commercialize “a payment smartstrap” called Pagaré that the company produced for the Pebble Time family of smartwatches.