PayPal and Samsung partnership advances wearables, biometrics

PayPal has made its entry into wearable technology through a partnership with Samsung.

The online payments company from San Jose and device maker Samsung announced Monday at the Mobile World Congress, a gathering of mobile device hardware and software makers in Barcelona, Spain, that Samsung’s new Gear 2 smartwatches would ship with the PayPal application. The PayPal app will allow Gear 2 owners to check-in to pay at local stores, save and redeem offers, send money to a friend and receive payment notifications, all from their smartwatch.

The collaboration signals the growing prominence of wearables – not just watches, but also pins, bracelets, head accessories that are connected to the Internet – in the mobile device business. It also underscores PayPal’s mobile-driven mission, which has in the last year included a handful of apps and a Bluetooth device that aim to transpose the old-fashioned wallet onto a smartphone.

The Gear 2 follows Samsung’s first Gear watch, a wrist computer that serves as a companion device to Samsung Galaxy branded smartphones. It has a camera, heart rate monitor, pedometer, and a sleep/stress app, and can control music and receive calls, emails and texts. It is expected to ship globally in April.

PayPal Vice President of Global Product Hill Ferguson said the company has no plans to make any smartwatches or other gadgets of its own, so its entry into wearables has been contingent upon hardware makers to perfect their devices. Both Google and Apple are rumored to be working on a smartwatch, too, but Ferguson said Samsung “came to us.”

PayPal has been eyeing the wearables market for at least a year. In an interview last November with this newspaper, John Lunn, PayPal’s  global director of developers, said his personal projects included working on PayPal integration with Internet-connected watches, lanyards and badges

Also on Monday, PayPal announced a bold move into biometrics, a security system that uses software to identify people using characteristics such as fingerprints or facial features. In another Samsung partnership, PayPal has rolled out an application for Galaxy S5 smartphones that allows users to log into their PayPal account and shop at any merchant that accepts PayPal using only their fingerprint. The fingerprint recognition, said Ferguson, replaces typing in the account username and password.

“This is a continuation of what we promised to do years ago, which was rid the world of passwords, which have run their course and we don’t need them anymore,” Ferguson said.

The fingerprint recognition system will work at one brick-and-mortar and online merchant that accept PayPal and where you can check out on a mobile device.

But PayPal likely has some work to do to convince wary consumers that the feature is safe. In September, a German group hacked into the fingerprint security system used to unlock Apple’s newest iPhone. The group, which calls themselves the Chaos Computer Club, created an artificial copy of a fingerprint that was used to access the phone.

Ferguson said PayPal hasn’t discovered any glitches that raised security worries while running tests of the software. The Galaxy S5 with the biometrics feature ships in April.

And there may be more Samsung-PayPal partnerships to come.

“This year and every year will be the biggest one for mobile for us for long time,” Ferguson said.

Image stock photo of Samsung Gear 2

Heather Somerville Heather Somerville (192 Posts)

Heather Somerville reports on consumer affairs, retail and technology for the Bay Area News Group. She lives in San Francisco, where she enjoys rock climbing, yoga and biking across the Golden Gate Bridge.