Smart Rings Seen as New Frontier for Cashless Payments
(Bloomberg) -- As retailers around the world seek ways to make it easier for consumers to shop seamlessly without touching anything, one company in Japan is betting its technology can rule them all: a smart ring that can act as a wallet and a key.
MTG Co., a Japanese health and beauty company, has started selling the “Evering,” which it envisions as a one-stop digital wallet. The chip-embedded ring, made out of zirconia, the synthetic crystal that’s sometimes used in place of diamonds in jewelry, lets people lock their door as they step out for a run as well as pay for drinks in stores.
MTG earlier this month struck a contract with Visa Inc. for the sale of an initial batch of 3,000 rings in Japan.
The Covid-19 pandemic has made touchless payments a much more popular method of purchasing. Amazon.com Inc. is pushing into cashier-less stores and deploying technology that lets consumers enter shops and pay using palm scans. In Japan, Signpost Corp. has deployed stores that don’t have any clerks or registers in a kiosk on the platforms of a train stations. In China, technology that employs facial recognition software is already being used for payments.
“We want to make a world in which people can live with a ring,” Yoshihito Ohta, MTG’s chairman, said in an interview.
Evering users make payments by holding it over a payment terminal. Priced initially at 19,800 yen ($182) in Japan, the ring, which is waterproof and doesn’t require charging, is linked to a credit card and payment histories can be accessed via smartphones.
MTG, which went public in 2018 on Tokyo Stock Exchange’s Mothers Market, a bourse for startups, plans to spin off its smart-ring subsidiary within months, Ohta said. The chairman’s goal is for Evering to reach a market capitalization of at least 100 billion yen, which would be higher than MTG’s current valuation of 60.4 billion yen.
The company posted an operating profit of 1.2 billion yen in the latest fiscal year, which ended in September, recovering from a 14.4 billion yen deficit the prior period due to an accounting scandal at its China unit. MTG shares are up about 34% this year, after climbing 30% last year.
“The business has potential to grow,” Ohta said of Evering. “It’s risky, but I think no other business has bigger potential than this.”
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