Fitbit just announced that it has acquired the wearable payments technology of Silicon Valley fintech startup Coin. Financial terms of the deal, which also includes the acqui-hire of key personnel, were not disclosed.
The initial assumption is that Fitbit plans to integrate mobile payments capabilities into its line of fitness bands and wearables, but the company said it has no intention of doing so right away.
Fitbit said it will not add any wearable payments technology to its 2016 product roadmap, but added that it does plan to "develop an active NFC payment solution that could be embedded into future Fitbit devices, broadening its smart capabilities."
The key word here is "smart", because in terms of wearable technology categories, the smart device segment is still difficult terrain for Fitbit. The company has had a longstanding hold on the basic wearable category with the success of its line of fitness bands, but Fitbit's smart devices have yet to make a dent in Apple's momentum.
Fitbit's smart devices include the Surge and Blaze smartwatches, but like the entire Fitbit product line, these devices are focused on health tracking and are therefore devoid of any third-party apps. Obviously, a mobile payments integration would change this and position Fitbit as a more in-line competitor of the Apple Watch. What's unclear, however, is how much the payments capabilities will help to grow sales.
"Coin has been one of the key innovators in advanced payment solutions," said James Park, CEO and co-founder of Fitbit. "The inclusion of their payment technology into our offerings will further our strategy of making Fitbit products an indispensable part of people's lives."
For Coin, the Kickstarter-backed startup is largely shutting down following the Fitbit deal. It will no longer sell its line of smart payment products, although existing Coin 2.0 cards will work as long as the battery holds out. No additional units will be produced.