From watches, wristbands and jewellery to glasses and clothing, the popularity of wearable technology is booming. The appeal of wearable payment for consumers is easy to understand. The ability to use items worn on the body to quickly and easily pay for goods and services takes convenience to a new level.
This paper explores wearable tech from a payments perspective, analyzing the current market and evaluating the future prospects it affords consumers, institutions, and the wider payment ecosystem.
Evaluating how contactless payment is already paving the way for new wearable payment factors, the paper outlines the challenges that will need to be overcome for mass take up to succeed.
Connecting issuers, processors, acquirers, device makers and application developers through unified tokenization and provisioning of wearable devices with account credentials is just the start.
Just as critical will be the widespread availability of POS terminals capable of supporting a variety of technologies - bar codes, HCE host card emulation, WiFi, embedded secure elements – and able to differentiate between open and closed loop ecosystems.
But that’s not all. With the emergence of new form factors, it’s increasingly unclear if the payment industry or consumer manufacturers are in the driving seat. Furthermore, there is currently little clarity around the standards that apply to devices manufactured by SPA members and those created by consumer brands currently tapping into a variety of payment ecosystems.
One thing is for sure, the more sensitive the data stored on such ‘devices’, so the more tantalizing become the opportunities for cyber criminals and fraudsters. Consideration will need to be given to the personal safety and security issues facing consumers who are out and about wearing their payment device.
The paper sets out a technology roadmap for stimulating consumer appetite and take up for wearable payment solutions. And highlights how brands and financial organizations looking to test the market and adapt payment models to the wearables sector will need to navigate a complex ecosystem that includes device manufacturers, payment tech vendors, regulators and banks.