5 insights into wearable payments
While the payment volume from smart wearable devices may not have achieved the initial euphoric predictions made by analyst firms — such as over $500 billion in annual volume by 2020 expected by Tractica research — things are about to change for the better as several market dynamics have shifted.
The global market for smart wearable devices is growing quickly, although not necessarily in the U.S., as Asian countries such as China are prodigious buyers of these devices. There are two big drivers behind the growing Asian smart wearables demand: lower prices and willingness to forgo premium brands for everyday products. For example, AliExpress, an online retail store based in China and owned by Alibaba Group, is selling the Xiaomi Huami AMAZFIT Bip smartwatch for $76.79 and the Xiaomi Huami AMAZFIT Verge 3 for $153.59. Compare that to the current Apple Watch Series 4 which starts at $399 and goes up to $799.
Consumer attitudes, bank willingness to support wearables and retailer accessibility have all improved in the last few years. Retailers and transit systems around the globe have made major strides and committed future investments for putting the infrastructure in place to accept NFC-based and QR code-based wearable payments. The growth of contactless card usage as well as the slow, but steady rise of mobile wallets such as Apple Pay and Alipay signal a growing consumer interest.