July 27, 2015 by Canadian Underwriter
Digital payments using wearable devices such as smartwatches, fitness trackers and payment wristbands will grow dramatically from US$3.1 billion in 2015 to US$501.1 billion worldwide by 2020, suggests a new report from market intelligence firm Tractica.
Wearable payment systems may utilize near field communication, radio frequency identification, or quick response (QR) codes and barcodes as enabling technologies, and the contactless point of sale (POS) terminals and backend payment processing infrastructure being utilized for mobile payments are being leveraged to extend payment capabilities to wearables, as well.
Tractica anticipates that by 2020, wearable payments will represent approximately 20% of the total mobile proximity transaction volume and about 1% of total cashless transactions in retail.
“Consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market,” Tractica added in a press release.
“Wearable payments are just getting started,” said 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.” [click image below to enlarge]
Kaul noted that 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.
Last week, the market intelligence firm also predicted that commercial drone shipments would surpass 2.6 million units annually by 2025 from 80,000 this year, with annual revenue from commercial drone hardware sales to reach nearly $4 billion within the same timeframe. Key industries utilizing small unmanned aircraft systems will include film, media, agriculture and oil and gas.