Wearable Payments: Sizing the Opportunity
All the vital news, analysis, and commentary curated by our industry experts.
The wearable payments market is still very much in its infancy, with most companies in this space still experimenting with form factors and functionality. Apple has emerged as a frontrunner with its payments-capable Apple Watch, but it is far from the only high-profile company in this space. With the market in its current state it is far too early to call Apple’s first-mover advantage decisive, and while this space is likely to see a lot of attention and investment in the coming years it is impossible to predict which companies will dominate.
• 25% of consumers globally possess a wearable device of any type (regardless of whether that device is capable of making payments).
• Features and pricing are the two most important factors driving purchases of wearable devices.
• China is the most immediately attractive market due to its sizable population and high proportion of potential early adopters.
Reasons to Buy
Understand the players in the wearables market – what products have they launched, and how likely are these to succeed
Find out how consumers view wearable payments as a concept, and how this varies between markets.
Find out where the wearable payments early adopters are, as well as what demographics they belong to in order to effectively market products.
Discover the three key factors to a successful wearable payments product – what do consumers want, and how is this best delivered to them
China Union Pay
Table of Contents
The wearable payments market is currently undergoing the proof-of-concept stage, with Apple leading the way
Critical success factors
DEFINING THE POTENTIAL
Wearable payments are mainly taking place within the physical proximity of a merchant's POS terminal
Eat24's smartwatch app looks to streamline repeat order purchases
Wearable payments are in the formative stages, with wrist-based devices the most widely deployed form factor so far
Disney's Magic Band provides proof of concept for wearable payments
Wearable payment developments intensified in 2015, with the supply side of the market driving much of the activity
Apple Watch is the first big effort at enabling payments with the wrist
Barclays' bPay range is one of the few examples of payment-only wearables
Most payments players are entering the wearables market through partnerships
Consumer appetite for wearable technology is positive, but a sizable number are unconvinced of its benefits
Wearable device holders are mostly open to the idea of using these devices to pay
Outside the current wearable user base, attitudes to wearable payments are less positive
Features and price are the biggest drivers of wearable device adoption
SIZING THE OPPORTUNITY
Consumer behavior and sentiment are at the heart of our Wearable Payments: Early Adopters Model
The Wearable Payments Early Adopters Model identifies four target groupings for wearable payment products
The banked and younger age groupings demonstrate the greatest early adopter potential
10% of all consumers are ready to adopt wearable payments immediately
China has the largest potential customer base for wearable payments
Wearable providers need to target the highest-potential demographics
The most immediate potential for wearable payments lies within the 25-34 age group
High-income earners show the greatest likelihood of being early wearable payment adopters
Men and women are almost equally as likely to be early adopters of wearable payments
Consumers who regularly revolve all or part of their credit card balance are the most likely to adopt wearable payment technology
Payments cannot be the only use case of a wearable device
Wearables must be convenient to use and compatible with POS infrastructure
Partnerships are critical to a strong product
Abbreviations and acronyms
Closed-loop digital wallet
Mobile proximity payments
Open-loop digital wallet
Transactors and revolvers
Interviews with leading payment companies and industry executives
2015 CPI Survey
About Verdict Financial
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