With tech giants like Apple, Android and Samsung pioneering the use of wearable payments, the industry is expected to significantly increase transaction volume to more than $500 billion by 2020. According to a recent report from Tractica, digital payments using wearable devices including smart watches, fitness trackers and payment wristbands will grow from $3.1 billion in 2015 to $501.1 billion by 2020.
“Wearable payments are just getting started,” says Tractica research director Aditya Kaul. “Apple Pay for the Apple Watch is the first big effort at enabling payments with the wrist. Soon to be launched, Android Pay and Samsung Pay are other prominent digital wallet solutions that will support smart watch payments. Key early market initiatives include trials and deployments of Barclays’ bPay system in the United Kingdom, Swatch’s partnership with UnionPay to enable wearable payments, Alipay’s partnership with Xiaomi in China, and Disney’s successful deployment of its MagicBand closed-loop payment and ticketing system at its theme parks, among others.”
To increase consumer acceptance and functional simplicity, wearable payment systems are combining banking with technologies including quick response (QR) codes & barcodes, backend payment processing infrastructures, near field communication (NFC), contactless point of sale (POS) terminals and radio frequency identification (RFID). Utilizing these technologies to expand payment capabilities while simplifying systems for users has lead Tractica to predict wearable payment representation to increase to about 20% of total mobile transactions.
Tractica’s predictions are made based on extensive examination of market opportunity for wearable payment systems and data on physical transactions made at POS terminals. By examining market drivers & barriers, enabling technologies, business models and more; Tractica forecasts wearable payment transactions from 2015 to 2020.
To download an executive summary of Tractica’s “Wearable Payments” report, visit https://www.tractica.com/research/wearable-payments/.
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