Wearable Payments Market

Wearable Payments Market Outlook – 2027 

The global wearable payments market 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 are a secure method for consumers to purchase products or services by using advanced technology integrated in their wearable devices. In addition, it is known as tap-and-go payment method by various retailers and organizations, as it provide retailers and vendors with more secure and error-free payment method. 

Post COVID-19, the grocery stores accounted for the highest market share, owing to rise in number of adoption of contactless payments among both retailers and consumers as they require less physical interaction.

Furthermore, many banks and financial institutions are providing wearable payment options for increasing their customer base across the globe and providing enhanced convenience in shopping outdoors for the customers across the globe. In addition, the adoption of wearable payments and contactless payment has increased over time, due to surge in adoption of smartphones and ease of transaction as compared to traditional banking.

Increase in adoption of cashless payments across the globe and rise in demand for wearable devices along with contactless payment for secure and safer payment transaction are the major factors driving the growth of the global wearable payments market. In addition, wearable payments provide enhanced customer experience and more convenient shopping experience to customers, which fuel the growth of the market. 

However, high cost of wearable devices and limited battery life of wearable devices hamper the growth of the market. On the contrary, surge in usage of usage of near-field communication technology (NFC), radio frequency identification (RFID), and host card emulation technology in wearable payments is expected to provide lucrative opportunity for the expansion of the global market during the forecast period. 

By application, the global wearable payments market is led by the grocery stores segment in 2019, and is projected to maintain its dominance during the forecast period. This is attributed to surge in adoption of wearable and contactless payments services from various retailers across the globe for increasing their customer experience. However, the other emerging applications such as transportation & sports stadium is expected to grow at the highest rate during the forecast period, owing to growing adoption of smart transportation and smart sports technologies in developed countries of Europe and North America drives the growth of the market.

Region wise, the wearable payments market share was dominated by Europe in 2019, and is expected to retain its position during the forecast period. The major factors that drive the growth of the market in this region include presence of key players and rise in penetration of wearable devices & smart chip payment systems across the region. However, Asia-Pacific is expected to witness significant growth rate during the forecast period, owing to expansion of the IT infrastructure, growth in investments from the private & public players, and high penetration of contactless payments in economies, such as Australia, Singapore, and Taiwan.

The report focuses on the growth prospects, restraints, and trends of the global wearable payments market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the global wearable payments market.

Segment Review

The global wearable payments market is segmented on the basis of device type, technology, application, and region. In terms of device type, it is fragmented into smart watches, fitness tracker, payment wristbands, smart rings and others. 

By technology, it is segregated into near-field communication technology (NFC), radio frequency identification (RFID), QR & bar codes and others. The applications covered in the study include grocery stores, bar & restaurants, pharmacies/drug stores, entertainment centers and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

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 key players have adopted various strategies, such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations to increase their market penetration and strengthen their position in the industry. 

COVID-19 Impact Analysis

During the COVID-19 pandemic wherein businesses are coping with operational challenges, many banks & financial institutions are providing their customers with new digital tools and techniques among which wearable payments have witnessed significant adoption. In addition, rise in penetration of contactless cards and wearable devices in the European region is providing growth potential for the wearable payments industry. 

Furthermore, many banks and FinTech industries have introduced various attractive banking strategies for supporting consumers to adopt wearable payments, which is creating numerous opportunities for the market. Thus, due to alarming increase in number of COVID-19 patients across the globe, consumers have adopted contactless payments, which has positively impacted the wearable payments market growth. 

Top Impacting Factors

Increase in use of NFC, RFID, and Host Card Emulation Technology in Wearable Payments 

NFC and RFID acts as integral parts of different wearable payment and contactless payments. Many wearable devices manufacturers such as Apple, Samsung, and Huawei are integrating NFC and RFID technologies into the development of their contactless cards and wearable devices, which is anticipated to offer remunerative opportunities for the growth of the global market. 

Furthermore, various companies are adopting NFC and host card emulation technologies for providing their customers easy access to the product which is displayed on their smartphones. For instance, KFC in 2019 in the UK launched an NFC-based advertisement campaign. The major aim of the campaign was to promote KFC’s Hot Shots Meal Box. With the use of NFC-based technology, customers can place their order by merely tapping LED screen. 

Thus, to promote home delivery services and increase the adoption of contactless payments systems, KFC started this service.   Moreover, companies are implementing host card emulation technology in their wearable devices for empowering wearable devices and increasing the performance of various mobile and wearable devices, thus proving to be a potential growth opportunity for the market.

Emerging Demand for Wearable Devices and Contactless Payment for Secure & Safer Payment Transaction

Increase in digitization across the globe and changes in lifestyle of people in developing and developed nations are driving the growth of the market. In addition, surge in adoption of wearable devices for various purposes, including fitness, fashion, and contactless payments boosts the growth of the market. Furthermore, increase in cyber-attacks on online payments and mobile payments systems across the globe have shifted the preference of many users toward the adoption of contactless payments systems. 

Thus, major banks and FinTech industries across the globe have adopted wearable and contactless payment services to improve the security of the transaction process and to ease up the transaction process. For instance, according to a report published by Visa in Australia in 2019, around 90% of the total transaction made in Australia and Czech Republic was through contactless payment devices, which is driving the growth of the market. Furthermore, advancements in contactless payments and wearable devices such as biometrics and EMV-enabled wearable devices for increasing the security features are anticipated to propel the growth of the market during the forecast period.

Key Benefits For Stakeholders

• The study provides an in-depth analysis of the global wearable payments market forecast along with the current & future trends to elucidate the imminent investment pockets.
• Information about key drivers, restraints, and opportunities and their impact analysis on the global wearable payments market size is provided in the report.
• Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
• The quantitative analysis of the market from 2019 to 2027 is provided to determine the market potential.

 Wearable Payments Market Report Highlights