Apple iWatch expected to address demand for payments-enabled wearables
Apple’s anticipated launch next week of an iWatch with a payment component will address the interests of young consumers, who view mobile banking and payment capabilities as the most important qualities for wearables to possess.
The finding was revealed in a new study from Boston’s Mercator Advisory Group. The report also states that 38 percent of the United States adults who responded, especially young adults, are interested in wearable technology devices with mobile compatibility.
“Wearables with payment functionalities solve the problem of getting payments made in a more speedy manner, as users can tap the wearable instead of pulling out a card or ticket from their wallet,” said Ben Jackson, director of prepaid advisory services at the Mercator Advisory Group, Boston. “Consumers already do so much with their phones, and wearables can simplify the payment process.
“I think wearables will exist side-by-side mobile phones; they will not be replacing mobile phones but simply offering a method of expansion, such as a phone linking to a watch or ring,” he said.
As consumers become more comfortable with making payments on their phones, there is an additional issue occurring simultaneously with interruptions associated with mobile payments.
Consumers are using their smartphones for so many tasks and do not want to be distracted from a common hobby, such as texting, to make payments, which lends a convenient opportunity for wearable devices.
Other studies performed by the Mercator Advisory Group have shown that mobile payments are of growing interest to consumers, and 43 percent of U.S. consumers have tried mobile payments, which increased from 31 percent in 2013.
In regards to demographic, there has been a significant change in the landscape of the average mobile user, who is more likely to be interested in ecoupons, ereceipts, mobile rewards, and more.
These users have the desire to make money transfers via mobile devices, as well as view payment and balance information via banking apps.
As screen sizes continue to shrink, the hassle of keying shipping, billing and credit card information has become overwhelming and deterring, further providing an opportunity for wearable devices to step in, which could store all of this information in one place.
The report findings are based on Mercator’s CustomerMonitor Survey Series online panel of 3,002 U.S. adult consumers surveyed in June 2014.
Among the many developing wearable devices, fashion has proven to be a crucial aspect of their success.
The Sesame Ring, a Kickstarter project initiated by a Massachusetts Institute of Technology graduate, allows wearers to scan the wearable as clearance of payment for ridership on the MTBA buses and trains in Boston.
These rings are available for purchase for $25 online.
All of the rings have a square face and are offered in different colors, but it can be argued that the rings are not as aesthetically pleasing as they are functional. Furthermore, it is questionable that consumers would not want to wear the ring at all times, and if that is true, the need for a wearable device to be executed as a piece of jewelry is not necessary.
If a wearable is introduced as a piece of jewelry, it must be well thought-out, said Mr. Jackson.
“The biggest issue with wearables is getting people to adopt them,” Mr. Jackson said. “A successful wearable will combine form and function. Developers will have to put some thought into aesthetic value of the wearable device along with the enabling of functions.”
EBay, Gilt and Airbnb are a few of the retailers showing their support of a certain wearable device that doubles as an aspiring fashion accessory.
New York start-up Ringly is a smart ring that collaborates with the product’s mobile application to alert users of incoming calls, texts or other notifications.
As fashion-forward wearables gain momentum, Ringly’s latest announcement regarding additional app collaborations parallels with the release of Philadelphia-based start-up Beacon and Lively and its introduction of its own stylish smart bracelet. Participating apps eBay, Gilt, Airbnb, Hinge, Lyft, Skype, Whatsapp and Words with Friends will offer customized alerts through Ringly’s line of smart rings (see story).
Functionality is not everything in the case of wearables. As consumers put a lot of thought into the jewelry they wear everyday, they will treat wearables the same way.
“Anyone who ignores the aesthetic value in the design of a wearable is doomed to low adoption,” Mr. Jackson said. “People have taste and certain desires; just because you can do something, if it’s not aesthetically pleasing, people aren’t going to do it.”
Caitlyn Bohannon is an editorial assistant on Mobile Commerce Daily, New York