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  5. > Wearable Payments: Contactless NFC, RFID, and QR/Barcode Payment Technologies for Smart Watches, Fitness Trackers, and Payment Wristbands

Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes as enabling technologies, and the contactless point of sale (POS) terminals and backend payment processing infrastructure being utilized for mobile payments are being leveraged to extend payment capabilities to wearables, as well.

Apple Pay for the Apple Watch is the first big effort at enabling payments with the wrist. Soon to be launched, Android Pay and Samsung Pay are other prominent digital wallet solutions that will support smart watch payments. Key early market initiatives include trials and deployments of Barclays’ bPay system in the United Kingdom, Swatch’s partnership with UnionPay to enable wearable payments, Alipay’s partnership with Xiaomi in China, and Disney’s successful deployment of its MagicBand closed-loop payment and ticketing solution at its theme parks, among others. Tractica forecasts that wearable payment transaction volume will grow from $3.1 billion in 2015 to $501.1 billion worldwide by 2020, by which time wearable payments will represent approximately 20% of the total mobile proximity transaction volume and about 1% of total cashless transactions in retail.

This Tractica report analyzes the market opportunity for proximity payments or transactions made physically at POS terminals utilizing wearable devices such as smart watches, fitness trackers, and payment wristbands. The report examines the market drivers and barriers, business models, enabling technologies, and key applications for wearable payments. Key industry players are profiled and case studies are provided for notable market trials and deployments. Market forecasts for wearable payment transactions and transaction volume are provided for the period from 2015 through 2020, and are segmented by device type, technology, and world region.

Table Of Contents

Wearable Payments: Contactless NFC, RFID, and QR/Barcode Payment Technologies for Smart Watches, Fitness Trackers, and Payment Wristbands
SECTION 1 2
Executive Summary 2
1.1 Introduction 2
1.2 Market Drivers . 2
1.3 Market Barriers 3
1.4 Market Forecasts .. 4
SECTION 2 5
Market Issues . 5
2.1 Definitions and Scope . 5
2.2 Market Drivers . 5
2.2.1 Wearable Payments as an Extension of Mobile and Contactless Payments . 5
2.2.2 Payments Are Likely to be the Killer Application for Smart Watches .. 6
2.2.3 Event-Based Wearable Transactions are on the Rise 7
2.2.4 Big Data, Wearables, and Contextualization of Payments .. 9
2.3 Market Barriers . 10
2.3.1 Scaling the Merchant Network . 10
2.3.2 Market Fragmentation .. 11
2.3.3 Aligning Stakeholders 12
2.4 Key Market Activity and Trials .. 13
2.4.1 Alipay and Xiaomi 13
2.4.2 Apple Watch - Apple Pay 13
2.4.3 Nymi, RBC, and MasterCard . 14
2.4.4 Barclays - bPay 15
2.4.5 CaixaBank and Gemalto . 15
2.4.6 China UnionPay and Industrial Bank Co. 16
2.4.7 Disney MagicBand . 16
2.4.8 First West Credit Union and Visa 16
2.4.9 Intellitix, IDandT, and TomorrowWorld.. 17
2.4.10 Jawbone and American Express .. 17
2.4.11 Swatch 18
SECTION 3 . 19
Technology Issues 19
3.1 Wearable Payment Technologies .. 19
3.1.1 NFC 19
3.1.2 QR Codes/Barcodes . 20
3.1.3 Biometrics 20
3.1.4 RFID .. 21
3.1.5 EMV 21
3.1.6 Secure Element, HCE, and Tokens .. 22
3.2 Open-Loop versus Closed-Loop Systems . 23
SECTION 4 . 25
Key Industry Players 25
4.1 Alibaba and Xiaomi 25
4.2 Apple . 25
4.3 Barclays 26
4.4 CaixaBank .. 26
4.5 Disney .. 26
4.6 Gemalto 27
4.7 Intellitix . 27
4.8 Intelligent Venue Solutions . 28
4.9 Jawbone .. 28
4.10 MasterCard . 28
4.11 Nymi .. 29
4.12 PayPal .. 29
4.13 Samsung . 30
4.14 Visa Europe 30
4.15 Wirecard .. 30
4.16 Additional Industry Participants 31
SECTION 5 . 32
Market Forecasts 32
5.1 Global Wearable Payments Market .. 32
5.1.1 Transactions by Device Type 34
5.1.2 Transactions by Technology . 36
5.2 North America .. 37
5.2.1 Transactions by Device Type 37
5.2.2 Transactions by Technology . 40
5.3 Europe .. 41
5.3.1 Transactions by Device Type 41
5.3.2 Transactions by Technology . 43
5.4 Asia Pacific . 44
5.4.1 Transactions by Device Type 44
5.4.2 Transactions by Technology . 46
5.5 Latin America 48
5.5.1 Transactions by Device Type 49
5.5.2 Transactions by Technology . 50
5.6 Middle East and Africa .. 52
5.6.1 Transactions by Device Type 52
5.6.2 Transactions by Technology . 54
5.7 Conclusions and Recommendations 55
5.7.1 Conclusions 55
5.7.2 Strategic Recommendations . 56
SECTION 6 . 58
Company Directory .. 58
SECTION 7 . 60
Acronym and Abbreviation List 60
SECTION 8 . 62
Table of Contents .. 62
SECTION 9 . 64
Table of Charts and Figures 64
SECTION 10 .. 65
Scope of Study 65
Sources and Methodology .. 65
Notes . 66

TABLE OF CHARTS AND FIGURES
Chart 1.1 Wearable Payment Transaction Volume, World Markets: 2015-2020 4
Chart 5.1 Wearable Payment Transactions by Region, World Markets: 2015-2020 . 32
Chart 5.2 Wearable Payment Transaction Volume by Region, World Markets: 2015-2020 .. 33
Chart 5.3 Wearable Payment Transactions by Device Type, World Markets: 2015-2020 . 34
Chart 5.4 Wearable Payments Transaction Volume by Device Type, World Markets: 2015-2020 35
Chart 5.5 Wearable Payment Transactions by Technology, World Markets: 2015-2020 36
Chart 5.6 Wearable Payment Transaction Volume by Technology, World Markets: 2015-2020 37
Chart 5.7 Wearable Payment Transactions by Device Type, North America: 2015-2020 .. 38
Chart 5.8 Wearable Payment Transaction Volume by Device Type, North America: 2015-2020 .. 39
Chart 5.9 Wearable Payment Transactions by Technology, North America: 2015-2020 40
Chart 5.10 Wearable Payments Transaction Volume by Technology, North America: 2015-2020 .. 41
Chart 5.11 Wearable Payment Transactions by Device Type, Europe: 2015-2020 . 42
Chart 5.12 Wearable Payment Transaction Volume by Device Type, Europe: 2015-2020 .. 42
Chart 5.13 Wearable Payment Transactions by Technology, Europe: 2015-2020 43
Chart 5.14 Wearable Payment Transaction Volume by Technology, Europe: 2015-2020 44
Chart 5.15 Wearable Payment Transactions by Device Type, Asia Pacific: 2015-2020 45
Chart 5.16 Wearable Payment Transaction Volume by Device Type, Asia Pacific: 2015-2020 . 46
Chart 5.17 Wearable Payment Transactions by Technology, Asia Pacific: 2015-2020 . 47
Chart 5.18 Wearable Payment Transaction Volume by Technology, Asia Pacific: 2015-2020 .. 47
Chart 5.19 Wearable Payment Transactions by Device Type, Latin America: 2015-2020 49
Chart 5.20 Wearable Payment Transaction Volume by Device Type, Latin America: 2015-2020 50
Chart 5.21 Wearable Payment Transactions by Technology, Latin America: 2015-2020 . 51
Chart 5.22 Wearable Payment Transaction Volume by Technology, Latin America: 2015-2020 .. 51
Chart 5.23 Wearable Payment Transactions by Device Type, Middle East and Africa: 2015-2020 . 53
Chart 5.24 Wearable Payment Transaction Volume by Device Type, Middle East and Africa:
2015-2020 .. 53
Chart 5.25 Wearable Payments by Technology, Middle East and Africa: 2015-2020 .. 54
Chart 5.26 Wearable Payment Transaction Volume by Technology, Middle East and Africa:
2015-2020 .. 55
Chart 10.1 Tractica Research Methodology .. 66
Figure 2.2 Apple Pay Using the Apple Watch 7
Figure 2.2 RFID Bands Used for Wearable Payments at Festivals 8
Figure 2.3 Apple Wallet on Apple Watch OS2 10
Figure 2.4 Nymi Band .. 15
Figure 2.4 Barclays bPay Payment Band .. 15
Figure 2.6 Dashband from First West Credit Union . 17
Table 4.1 Additional Industry Participants 31

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Related Market Segments :

Mobile Payment
Payments
RFID
Wearable Electronic

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