Wearables are the new generation of smart devices. These gadgets are pretended to be garment or complement.
The payment method industry is evolving; we are not yet familiar with the contactless technology (NFC), when the disruptive innovation of the wearables is taking place. Wearables offer new experiences and an innovative, simple and satisfying usage.
According to the International Data Corporation (IDC), in 2014 there were registered 19,6 millions of wearables and it is estimated that in 2019 there will be sold 126,1 million units worldwide. The growth rate of adoption, would come mainly from wearables to wear on your wrist.
It seems that, as far as payments are concerned, the industry will focus primarily on the smartwatches and bracelets, but even in the UK, payments with gloves had been tried. In the case of the bracelets, there are already companies exclusively dedicated to the manufacture. Others offer them to their clients, like banks, some of them Spanish.
In Spain, some events have been held where the attendees could pay through bracelets wearables that were provided to them. In this way, users of this technology do not need to pay with cash or credit cards.
However, it seems that the target audience of wearables are millennials (between 18 and 34 years old). According to the IDC, in 2018 the 16% of the population will belong to this generation and will accelerate the process of adoption of this technology to be permanently connected as a lifestyle. In addition, another recent study of Intelligent Environments reveals that half of British millennials has made a transaction through a wearable device in the last six months.
Taking into account another study made by Tractica, payments via wearables will represent the 20% of the contactless dealings. The convenience is obvious, but what about security?
It should be mentioned that they work like a credit card. The connection between the payment terminal and the wearable only works when both devices are very close to each other. Moreover, as also happens with contactless cards, for transactions of greater volume a validation by the PIN code is required.
Nevertheless, it seems that it can be "too accessible" to carry your money on the wrist, which may cause concern among consumers. Therefore, there are companies working on perfecting even further the safety of these products. Currently, research hover around the identification of the person's heart rate, something unique and impossible to transfer from one person to another.
Overall, the statistics seem to be on the side of wearables as well as the trend of consumption of technology. However, it is obvious that the user should feel safe enough to carry a wearable as a payment method. For now, apparently only the millennial generation has the confidence to make use of this technology.
The importance of data analysis in wearables
“With wearables we have the ability to obtain data on the spending habits of consumers. The future probably passes by predictive payments, so with a simple frequency for purchasing the same service and in the same place, the transaction is done automatically. Is it the end of the queue for a coffee or buy bread? What is clear is that the solution is a gadget of our daily live; the wearable era begins”, according to Íñigo Arroyo, from the Communication Department of Sipay, the first payments gateway which has obtained all the PCI DSS 3.1, level 1 certifications, which offers payments solutions to every business with a personalized service for their selling points, ecommerce, mobile payments and Mo/To (Mail Order/Telephone Order).