Wearables: Tap to Pay Movement | Investera | Investment Portfolio Management Platform

Wearables: Tap to Pay Movement

24October, 2021

Technology is no longer a tool; it stands out as a way of life and a choice for change. Not far beyond  the former definition of technology; new or emerging technology works in line with hyper digitalization and the  growth of innovative technologies such as digital banking and payments. 

Digital payments are the transactions that take place via online modes with no physical exchange of money like banking cards, neo-banks, mobile wallets, mobile banking and recently wearable payment devices.

An increase in the adoption of wearable payment devices was witnessed amidst the pandemic due to the substantial urge of contactless practices and hygienic safety measures, not to mention the fact that novelty is on the rise and generations are constantly awaiting technically-sophisticated gadgets. So, besides the trend of technology and the latest devices, why are consumers drawn towards wearable payments? What’s in it for them?

Let’s shed the light on the 4  motives that drive consumers to use wearable payments. 

  1. Concept of Functionality

Nowadays it’s all about practicality and processing deals in quick manners; which requires users adapting to online procedures. This includes the digital payments that are carried out through an integration of bank accounts with the use of wireless technologies such as near-field communication (NFC) and radio-frequency identification (RFID) working as an extension of the card itself. Consumer’s are on the go now, their preferences have changed to suit their fast-paced lifestyles and digital payments has made it easier by staying on top of the game with their introduction of different methods of payments which includes paying with wearable technologies.

  1. Paying with Style

Consumer spending behaviors have changed pre and post pandemic with access to new technologies that match the modern style of living. Besides being handy, wearable devices gained popularity in the last few years, due to their availability in different forms such as wristbands, fitness trackers and jewelry (phone-cases, rings and keychains). Consumers tend to look for options that would represent their characters and enable personalization while remaining fashionable and modern.

  1. Beneficial Utilization 

The use of wearable payment methods in day to day activities offer comfort and convenience; as they are lightweight and customizable to consumer needs. Also, they are secure, durable with long-lasting battery life and allow for swift, contactless interactions. This leaves lower margins for error, allowing the consumers to get going with the payments without the need to be concerned nor irritated.

  1. Multipurpose Gadgets

Along with the paying process, some of these gadgets have additional features, such as GPS tracking and monitoring health and wellness, which includes heart rate, blood pressure, sleep patterns and physical movement. All of which makes it easier for consumers by just carrying one gadget for all their needs.

Despite being an accelerating industry, a lot of  competition between companies exists to stand out in their offerings. One key player of the industry is Apple, who just in the third quarter of 2021, stated that the revenue of Apple’s wearables surpassed the revenue of Mac and iPad; as they remain the optimum choice for the consumers to track and stay on top of their health along with the feature of the apple pay easing their payment difficulties.

Samsung Electronics Co Ltd’s third quarter of 2021 revenue was stated to be around $61.2 billion, which is 28% higher than its revenue in the third quarter of 2020. With its smart watches series of products,  it marked the highest-ever quarterly revenue, thanks to its robust chip sales.

Seeing the growth of existing players and new entrants, the wearable payments industry is expected to reach $782 million by 2025 growing at a CAGR of 18.17% from $329 million in 2020.

Moreover, events like TRUSTECH 2020 which is taking place in France will be exhibiting the up-to-the-minute hardware and software technologies that are related to payments, identification and security in the markets.

All in all, the wearable payment devices industry witnessed a significant jump in its fintech applications,taking into consideration its effective usefulness, fashionability, productivity and dimensions. 

Nevertheless, the rising question would be to what extent would the payment methods extend its automation?