Barclays Calls Fitbit's Payment Acquisition 'Meaningful'

Fitbit Inc (NYSE: FIT) announced the acquisition of wearable payment assets from Coin, a consumer electronics and financial technology company, at an undisclosed price. Barclays’ analysts expect the acquisition to be meaningful once the integration into Fitbit’s product platform is complete.

The acquisition will include the personnel and intellectual property related to Coin's wearable payment business, but exclude Coin’s mobile wallet. Fitbit does not plan to integrate the acquired technology with its product platform in 2016.

Adoption Of Mobile Pay Tech Grows

The analysts believe that the integration of mobile payment technology with Fitbit’s devices will result in improved engagement rates. The inclusion of the new functionality will also make Fitbit’s device more indispensable.

Related Link: Fitbit Buys Wearable Payments Assets

“Furthermore, it increases convenience to meet consumers' fitness goals as carrying wallets can be seen as a nuisance by many runners. As more retailers become compatible with Near Field Communication (NFC) chips, we should see the adoption of mobile payment technology increase,” the Barclays report stated.

Fitbit’s expanding ecosystem should allow the company to capitalize on the growing adoption of mobile payment technology. Several companies including Walt Disney Co (NYSE: DIS) have already implemented wearable payment options.

The analysts commented that the acquisition would allow Fitbit to continue distancing itself from its competitors in the wearable space. They added, “We believe that mobile payments will becoming a critical feature of any wearable product and as such are encouraged by FIT's focus in this specific area.”