The wearables market had a boost in 2017, and payments played a big part. Notable releases, such as the Fitbit Ionic proved that wearables once restricted to simple tasks such as counting steps or heart rates are getting a new lease of life by becoming payment-enabled.

Forecasters predict that 62 per cent of wearables will feature payment functionality by 2020.

The potential of wearable devices has been questioned in recent years, but global sales of smart wearable devices stood at $16.2 billion in 2016. While their popularity has inevitably been boosted by the global trend towards fitness and wellness, 2017 was the year in which manufacturers looked at how wearables could complement multiple aspects of owners’ lifestyles. This trend looks set to continue in 2018.

This includes anything from monitoring the air quality and humidity in a smart home and adjusting the temperature based on how warm your body is, to helping you improve the quality of your sleep and paying for your morning smoothie. Payments are an integral part of each day, and wearables are among the quickest and easiest ways to pay.

The increase in payment-enabled wearables is driven by two things: demand for contactless payments and improved security.

The popularity of contactless payments isn’t slowing. At the end of 2017, contactless spending in Ireland had grown 265% year-on-year on the Mastercard network. City-dwellers in particular are realising the benefit of contactless payments for transport and paying on-the-go, and wearables make this easier than ever.

There are now numerous ways to pay with wearables, including smartwatches with Samsung Pay, Android Pay or Apple Pay, or fitness-focused wearables such as Garmin Pay or Fitbit Pay.

Sophie Charara, features editor at Wareable says: “Owners of smartwatches and fitness trackers are becoming more psychologically attached to their wearables – much less abandoning them in drawers as a few years ago – and contactless payments is one of those everyday features which has really helped to increase this stickiness. Being able to tap your wrist to get on the tube or pay for snacks can be a dealmaker addition to both single purposes devices – like running wearables and smart jewellery – and do-it-all flagship smartwatches.”

The improved security we see in wearables has been made possible through a process called ‘tokenisation’. Mastercard’s tokenisation system ensures that your 16-digit card number is not used or stored on the wearable device – instead an alternative number, dubbed a ‘token’ with its own associated security credentials, is allocated to each new device. This enables the wearable device to make payments with exactly the same kind of transaction security as your physical chip and PIN card.

Contactless payments above €30 require the extra security of a password, PIN or fingerprint which is typically that already used on your connected smartphone. Many wearables such as the Apple Watch use ‘persistent identification’, meaning that once the wearable has been ‘unlocked’ (usually via a connected smartphone) it is ready to pay until such time as the wearer removes it from their wrist.

Manufacturers are moving quickly. In just two months Fitbit Pay and Garmin Pay have launched in 10 countries with multiple card issuers. This is just the beginning. We are working with numerous manufacturers on wearable payments, from smartwatches to fashion and luxury items.

Some of the other trends to look out for in the wearables market in 2018 include:

  • More technical health trackers that monitor different aspects of our health and lifestyle, helping identify and prevent illness. Incentives could come in the way of reduced health insurance premiums, as wearables can monitor wearers’ lifestyles.
  • Further innovations in using wearables for to manage long-term illness, including smart shoes to help diabetes sufferers.
  • More sophisticated smart clothing, following the release of Levi’s Commuter Trucker Jacket with Google in 2017.
  • Wearables in more and more places when you travel, allowing holiday companies to offer tailored, individual experiences based on holidaymakers behaviour. Carnival’s Ocean Medallion being one such example.
  • More non-tech brands implementing wearable tech into their ranges. Expect to see more fashion, jewellery and sports brands entering the market.
  • Smaller and more discrete wearables, such as ‘hearables’.


Article written by Mike Cowen, vice president of digital payments at Mastercard UK and Ireland.

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