Wearables: The Next Big Thing in Electronic Payments.


Wearables: The Next Big Thing in Electronic Payments.


Thanks to the proliferation of mobile technology, mobile payments seem to be trending, with an increasing number of people choosing to make payments through mobile devices. However, the electronic payments scene may change soon. Wearables, especially smartwatches, are believed to be the next big thing.

The payments scene may soon be flooded with wearables being used for making payments, instead of mobile phones. In an effort to simplify the payments process, payments industry and technology companies are keen to turn to smartwatches. It seems that with all the innovations in the wearables industry, now is the best time to look at purchasing smartwatches.

With experimentation under way, the wearables electronic payment solution will reduce friction at payment terminals, saving time for both customers and sellers, and helping retailers boost sales. Technology companies and financial institutions are focusing on leveraging the near field communication devices to get going.


Wearables as a Payment Medium

Yes, possibly, wearables may hold the key to unlocking opportunities for customers to make quick, hassle-free payments online with just a wave of the wrist. Products, such as AppleWatch, enable consumers to use their gadgets for making electronic payments. More and more commerce-connected wearable devices are expected to rock the scene, as technology makes its headway in this field.

Wearables shipments are likely to register a significant growth of over 235 million devices by 2020. It is expected that 30-40% of wearable devices will have a payments function by 2019.

Related: More Payment Options Mean More Sales for eCommerce Stores


Going forward, you can expect to see more commerce-connected wearables. The latest experimentation in this regard was a multi-utility stretchable disposable patch. When paired with a mobile, tablet, smartphone, or NFC reader, these devices enable a range of consumer applications, including contactless electronic payments at the POS (Point of Sale).

Contactless payments are here to stay and are expected to grow to $95 billion in 2018. As a result, wearable devices with payments function embedded are likely to be the ultimate choice. Research suggests that, by 2018, owners of wearables are likely to spend $1.9 billion making payments with their devices.

By 2020, wearable payment transaction volume is expected to register significant growth, rising to $501.1 billion from $3.1 billion in 2015. By then, wearable payments will account for 20% of the mobile proximity transaction volume.

Related: Retail Payment Trends in 2016


With credit card fraud being a serious issue, the option to make payments via wearables may click with consumers, who are looking for secure payment options. The advantage with wearables is that they use unique biological identifiers as an authentication method before approving payments. This means anybody else wearing your wearable device can’t make a purchase with your device.

No doubt, wearables seem to have a wide acceptance among consumers, there is still a long way to go before they become a noteworthy electronic payments alternative.


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