According to a recent report published by Allied Market Research, titled, “Wearable Payments Market By Device Type, Technology, and Application: Opportunity Analysis and Industry Forecast, 2020-2027”, the global wearable payments market size was valued at $285.47 billion in 2019, and is projected to reach $1.37 trillion by 2027, growing at a CAGR of 21.7% from 2020 to 2027.
Wearable payments use near-field communication NFC chip technology for verifying the customer & the buyer and to make contactless payment. In addition, the major purpose of wearable payment is to protect the confidentiality of transactional data of the customer and to enhance the security by providing contactless payments.
Furthermore, numerous benefits are provided by wearable payments devices such as anticipating the need of the customer, providing better customer engagements, and improving the retailer’s ability to track the payments of the customers, which significantly boost their demand, globally.
In addition, increase in adoption of cashless payment across the globe and rise in need for secure & safe contactless payment augment the wearable payments market growth. Moreover, convergence of wearable devices and e-banking by deploying NFC technology in devices fuels the growth of the market.
However, increase in risk of security issues pertaining to wearable devices and high cost of wearable devices hamper the growth of the market. On the contrary, advancements in wearable devices such as host card emulation (HCE) and increase in investment in wearable devices by SMEs are expected to provide lucrative opportunity for the wearable payments industry.
By technology, the global wearable payments market was led by the near-field communication (NFC) technology in 2019, and is projected to maintain its dominance during the forecast period and is also expected to grow at the highest rate during the forecast period. This is attributed to increase in need for better connectivity between devices and surge in production of NFC-based wearable devices.
Region wise, the wearable payments market was dominated by Europe in 2019, and is expected to retain its position during the forecast period. The major factor that drives the growth of the market in this region includes early adoption of advanced technology among end users and rise in government initiatives for increasing the adoption of wearable and contactless payment in Germany, the UK, and France.
However, Asia-Pacific is expected to witness significant growth rate during the forecast period, owing to increase in adoption rate of wearable devices and contactless payments among the developed countries such as China, India, and Vietnam.
Though COVID-19 crisis continues to disrupt many industries, it has opened opportunities for high adoption of digital transformation approaches among which wearable payments services have gained high importance and adoption. When state-and country-wide lockdowns initiated at the beginning of 2020, demand for contactless payments and wearable payments increased due to rise in cases of coronavirus patients across the globe. Furthermore, various key players of the market are introducing new strategies to enhance the customer experience and to improve their market share in the pandemic situation.
Key Findings of the Study
- By technology, the NFC technology accounted for the highest wearable payments market share in 2019.
- On the basis of application, the grocery stores segment generated the highest revenue in 2019.
- By device type, the smart watches accounted for the highest wearable payments market share in 2019.
- Region wise, Asia-Pacific is anticipated to exhibit substantial growth during the forecast period.
The key players profiled in the wearable payments market analysis are Alibaba Group, Apple Inc., Barclays Plc., Fitbit, Inc., Google, Inc., Jawbone, Mastercard, PayPal, Inc. Samsung Electronics Co. ltd., and Visa Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.