The expansion of smart devices from things you hold (phones, tablets) to things you wear (watches, monitors) is accelerating. Presently, there are some 92 million wearable devices on the market and experts predict more than 163 million will ship in 2017 alone. What’s more, just a few years ago, wearable devices enabled with any sort of payment capabilities were practically unheard of; today, there are nearly 40 million in circulation. Wearables are more than just smart devices in different packages. They will change how people interact with apps and physical institutions where wearable devices are used.
One of the surprising side effects of the mobile revolution has been the psychology of moving computing from desktops to pockets. People have formed deep, emotional connections with their devices and there is no reason to expect anything different with smart watches and monitors. In fact, in the first year Apple Watch was available, more than 12 million units were sold. Only half as many iPhones were sold in the first year. As wearables continue to evolve and present more relevant information for users, they will become the ultimate form of mobility, utterly interwoven into users’ lives.
To date, wearables on the wrist comprise the majority of products – smart watches, fitness monitors and heart monitors. Developers are also investing in rings and bracelets as “smart jewelry” or “smart accessories.” Many predict the next step for wearables will be high fashion – technical devices that incorporate elegance and an air of exclusivity. New wearables may come to market as multiple designs or even with modifiable screens that mimic luxury items – for instance, smart watches that appear to be high-end mechanical time pieces. Combining usability and visual appeal will help wearables gain acceptance.
As wearables become ubiquitous, will payments – compatible for each particular device – follow? Developers, card brands and processors will need to roll out solutions in a scalable method. Users will need to see a compelling value to use wearables to pay, rather than smart phones or, for that matter, physical credit cards. The value, however, will come with the convenience of a payment device accessible by a simple wave or tap near a contactless portal. History has demonstrated that any significant reduction in friction at the point-of-sale aids adoption.
Initially, new technologies and the sheer variety of potential products will present speed bumps to rolling out a unified vision for wearable-enabled payments. Yet, demand will drive innovation. Look for payments-enabled wearables soon… probably somewhere near your hand.