It’s no surprise wearables including smart watches, fitness trackers, and wristband devices are growing in popularity. Market intelligence firm Tractica studied the impact wearables will have on payments and concluded the global transaction volume from these devices will be about $501 billion by 2020.
According to Tractica’s report wearable payments will represent approximately 20 percent of the total mobile proximity transaction volume and about 1 percent of total cashless transactions in retail, which are anticipated at more than $50 trillion by that point.
Tractica points out wearable payment devices can use near field communication (NFC), RFID, or quick response (QR) or bar code technology. In addition, contactless point of sale (POS) and payment processing infrastructure used for mobile payment is being used to accept payment from wearable devices as well.
Tractica research director Aditya Kaul says following Apple Watch will be smart watch payments supported by other digital wallet solutions.
A Mobile ID World article points out however, “The question of whether wearable technology is going to take off as a delivery mechanism for mPayments remains up in the air. mPayments seem inarguably on the rise, and if wearables do take off as Tractica expects, such devices will certainly offer a convenient avenue for cashless transactions.”
Tractica’s report, Wearable Payments, also examines market drivers and barriers, business models, enabling technologies, and key applications for wearable payments.