Increasing Contactless Adoption Will Drive Payment-Enabled Wearables Market to US$7.2 Billion in 2024

The wearable payments market is being driven by a surge in contactless payment adoption, as a result of growing usage of contactless cards and Near-Field Communication (NFC)-enabled mobile payments. In large part, this usage reflects a growing trend in changing consumer behavior regarding payment habits and trends, driven by maturing smartwatch technologies, evolving tokenization platforms, and the convergence with other end verticals such as ticketing and transport, and fitness and health applications.

As a result of these trends, global tech market advisory firm, ABI Research forecasts US$7.2 billion in global revenue from the sale of payment-enabled wearables in 2024.

Ecosystem players such as wearable OEMs, silicon and IP providers, payment enablers, and financial application developers are all working to develop wearable payment experiences that are EMV-compliant, lightweight, interoperable, and intuitive UI. But most importantly, wearable payment technology can easily converge with other applications, such as loyalty and rewards, fitness and health, ticketing and transport, access control, etc., offering up new revenue streams and business opportunities for the various stakeholders.

This can be seen primarily by the growing adoption of open-loop payment systems in active devices such as smartwatches, which are outstripping closed-loop passive devices (such as silicon wristbands) in terms of shipment numbers over the forecast period. Regardless of device type however, increased merchant acceptance and growing consumer adoption serve to highlight the ease and convenience of wearable-enabled payments.