Are Wearables the Key to the Mobile Payment Revolution?

by Matt Klassen on July 24, 2015

While we’ve been waiting for several years for the arrival of the promised mobile payment revolution, for several months now wearables—particularly smart watches—have been increasingly touted as the platform that will finally change the way we make financial transactions.

It should come as no surprise then that industry experts are now predicting that not only wrist-mounted wearables, but “wristbands, jewellery, key fobs and other so-called wearables, as well as mobile phones, are expected to follow a surge in tap-and-go payments in countries where card issuers, banks, retailers and consumers have embraced the technology.”

Simply put, analysts are predicting that the exponential explosion in wearables—of all sorts of wearables—will provide the push users will need to finally embrace the mobile payment revolution, despite the fact that polls still show widespread apathy and distrust towards the new payment reality.

According to technology research firm CCS Insight, the number of wearables shipped that could be tasked in the mobile payment revolution will increase almost threefold, from 29 million last year to an estimated 75 million. This means, for starters, that mobile payment solutions will become, in nothing else, far more widely available, and that, industry analysts think, will likely be enough to finally spark a widespread transition for wallets and credit cards towards mobile banking.

“Payments is a really key element in the direction of technology at the moment. There are lots of companies trying to crack this nut, and the key is it needs to be secure and easy,” said Ben Wood, analyst at CCS.

One of the key factors in wearables becoming a central part of the mobile payment revolution is, surprise surprise, Apple, with its concomitant releases of the Apple Watch and Apple Pay. By combining its much-sought-after wearable with a mobile payment solution, the Cupertino Company can once again recreate an industry it neither pioneered nor previously existed in.

In fact, looking at places where mobile payments have already taken hold, such as Europe and Asia, many think it’s just a matter of time before they take hold here in North America as well. The only problem here, though, is widespread distrust.

According to a Gallup poll released last week, only 13 percent of 17,000 respondents indicated they had a digital wallet on their smartphone, with the vast majority of those surveyed indicating that security concerns were the primary inhibitor of mobile payment adoption.

  • gain consumer trust regarding personal data security;
  • educate consumers about what digital wallets are and how to use them; and
  • provide a clear value proposition.

As one who has followed the mobile payment revolution from the beginning, let me say that Gallup’s recommendations are the same sorts of things we’ve been saying for most of the last five years, leading me to wonder if wearables will actually be enough to finally get the average North American person to ditch the wallet and embrace the future of mobile payments.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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