About Wearable Payment
Wearable payment refers to transactions between wearable devices and contactless payment terminals like NFC. NFC is a standard-based short-range (about 10 cm) connectivity that uses high-frequency wireless communication technology. This technology enables peer-to-peer communication between two devices, by bringing them in close proximity. End-users use this technology to transfer information from their devices to contactless payment terminals such as smartphones and NFC tags. The technology involves a direct transfer of data between wearable devices and POS devices.
Technavio’s analysts forecast the global wearable payment market to grow at a CAGR of 59.44% during the period 2016-2020.
Covered in this report
The report covers the present scenario and the growth prospects of the global wearable payment market for 2016-2020. To calculate the market size, the report provides a detailed forecast of the market transaction revenue and shipment of wearable payment devices.
The market is divided into the following segments based on geography:
Technavio Announces the Publication of its Research Report – Global Wearable Payment Market 2016-2020
Technavio recognizes the following companies as the key players in the global wearable payment market: Apple, Jawbone, Google, MasterCard, Samsung Electronics, and Visa.
Other prominent vendors in the market are: Alibaba Group, American Express, Barclays, Broadcom, Fitbit, Gemalto, Infineon Technologies, Inside Secure, MediaTek, Microsoft, NXP Semiconductors, Qualcomm, PayPal, Renesas Electronics, Sony, and Xiaomi.
Commenting on the report, an analyst from Technavio’s team said: “One of latest trends in the market is decline in cost of wearable devices. Smartwatch, which is one of the latest technologically advanced fashionable accessories, has high growth prospects but is expensive for budget-conscious people. The ASP of smartwatches declined from $299-$350 in 2014 to $150-$199 in 2015. Most of the wearable device manufacturers reduced the ASP of devices to make products more affordable for users and to increase sales volumes. The price was also reduced to attract a larger target consumer segment and to sustain in the competitive market. The competition in the market is increasing with the entry of several start-ups and technology companies in the market. Every half year, companies are launching newer versions of the existing products. Manufacturers reduce the costs of the existing versions to ensure that they are sold and to allow the entry of newer versions of products. We expect the prices of smartwatches and fitness bands to decline over the next few years, making them more affordable for end-users.”
According to the report, one of the primary drivers in the market is declining cost of NFC technology. The global wearable payment market is driven by the declining cost of NFC technology. The technology has become more affordable for device manufacturers that integrate the technology into wearable devices. In addition, as the number of vendors offering wearable devices is increasing, it is likely to support the growth of the wearable payment in the coming years. The declining price of NFC technology and the growth of the NFC ecosystem that supports various NFC applications have encouraged vendors to integrate NFC technology into wearable devices. Jawbone launched the fitness device UP4, which is integrated with payment technology. This will likely encourage more people to adopt NFC-enabled wearable devices, which will in turn, drive the growth of the global wearable payment market during the forecast period.
Further, the report states that one major challenge in the market is high price of smartwatches. The high price of wearable devices, especially smartwatches, is a factor hindering their adoption. High-end smartwatches such as Apple Watch accounted for more than 85% of the global smartwatch market in 2015. Though the demand for wearable devices is expected to increase during the forecast period, the willingness of customers to invest in smartwatches is comparatively low. In addition, the limited battery life in smartwatches is expected to act as a major limitation for the market growth. The ASP of wristbands is expected to decline during the forecast period because of evolving technologies and growing competition between wrist wearable manufacturers in the market. The market shows the presence of many high-end manufacturers that offer smartwatches at premium prices. New and small players are increasing their R&D investments to develop smartwatches that are more economical. This will likely reduce the prices of smartwatches during the forecast period.
Apple, Jawbone, Google, MasterCard, Samsung Electronics, Visa, Alibaba Group, American Express, Barclays, Broadcom, Fitbit, Gemalto, Infineon Technologies, Inside Secure, MediaTek, Microsoft, NXP Semiconductors, Qualcomm, PayPal, Renesas Electronics, Sony, Xiaomi.