With a quarter of global consumers currently in possession of a wearable device of any type, the notion of wearable payment devices is becoming gradually accepted by customers, according to financial services research and insight firm Verdict Financial.
The company’s recent report revealed that only 10% of global consumers are ready to adopt any form of wearable payment device as soon as it becomes available, pointing to a market still in the very early stages of development. The key drivers of early adoption of wearable payments were found to be the range of features on offer, and the device’s price.
Samuel Murrant, Senior Analyst covering consumer payments at Verdict Financial explains: “Wearables have a lot of potential as payment tools, but that payments functionality alone cannot sell wearable devices.
“Consumers value features highly when it comes to wearable devices, with 65% of consumers who either own or would like to own a wearable stating that features are important. Payments, however, will always be an afterthought in the purchasing of a wearable device, as consumers have so many ways to pay already. Paying extra for a way to make payments simply does not make sense for most consumers, who already have access to cash, cards, and mobile wallets for a low cost.”
Apple has seized first-mover advantage in wearable payments with its multi-functional yet expensive Apple Watch, but it is far from the only high-profile company in this space. Banks, card schemes, and fintechs alike are all aiming to secure a slice of the emerging wearable payments market via partnerships and product launches. Partnerships within this space are critical, since payments companies do not tend to have the expertise to create compelling devices, while device manufacturers lack payments expertise.
“In general, the payments industry should focus on partnering with companies selling compelling, multi-functional wearable devices and incorporating payments functionality into them,” Murrant concludes.
Editor’s notes
– Information based on Verdict Financial’s report: Wearable Payments: Sizing the Opportunity.
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