Smartwatch payments challenged by lack of consumer interest: report
While smartwatches are expected to give mobile payments a much-needed boost, a new report suggests that consumers are not exactly clamoring to pay for purchases using one of these devices.
Because using a smartwatch at the checkout is easier than having to pull a smartphone out of a pocket, some industry watchers expect consumers will be quicker to embrace smartwatch payments than smartphone payments, which have been slow to catch on. However, a new report from GfK found that only 35 percent of respondents to a recent survey that was conducted in five countries are interested is smartwatch payments.
“Consumers seem to be very open towards the Internet of things and the security potential that smartwatches could bring them,” said Anselme Laubier, technology expert at GfK.
“Using a smartwatch to secure online accounts and computers, as a public transportation card and to store health information for medical purposes is well accepted especially in Asia and the US. European consumers are a bit more conservative here,” he said.
“Using a smartwatch as ID card or for mobile payment could be an option for 40 percent of the US consumers we interviewed.”
Chinese bullish on smartwatches
The level of interest in smartwatch payments differs by country, with respondents in China and the United States expressing the strongest interest at 54 percent and 40 percent, respectively.
In comparison, only 28 percent of respondents in South Korea are interested in smartwatch payments, 27 percent in Britain and just 20 percent in Germany.
The main activities consumers are interested in conducting via smartwatches include sports, navigation, phone calls and apps.
However, the results suggest there is also potential to use smartwatches for transportation tickets or as a security key to a computer or online account.
One potential use for smartwatches would be to provide doctors and hospitals with the wearer’s personal healthcare data.
Here, too, consumer interest in such services differ widely by country, with 69 percent of those surveyed in China interested in this compared with 50 percent in the U.S. and 43 percent in South Korea. In Britain, around one-third of respondents are interested in using smartwatches for healthcare data while one-quarter of Germans are interested.
The results also show differences by gender and age group, with men more open than women to the idea of storing healthcare data on a smartwatch while interest is higher in older age groups.
The findings show a clear potential for smartwatches as travel tickets, with just less than half of respondents across all countries saying they would be happy to use a smartwatch for this purpose. By country, 63 percent of Chinese consumers are interested, 54 percent of South Koreans, 41 percent of Americans, 32 percent of British and 31 percent of Germans.
Smartwatches also hold potential in online identification, with 45 percent of respondents overall saying they would be interested in using a smartwatch as secure identification to log onto personal computers or access online accounts. Interest increases by age.
By country, with 68 percent of Chinese interested in this capability, 49 percent of Americans, 37 percent of South Koreans, 33 percent of British and 25 percent of Germans.
Overall, 38 percent of respondents would be interested in using a smartwatch as an ID card when going abroad or visiting the authorities. By country, this feature is favored by 57 percent of Chinese, 41 percent of Americans, 33 percent of South Koreans, 28 percent of British and 20 percent of Germans.
The findings have implications for marketers, who are eyeing smartwatches and the potential opportunity to develop their own applications for them.
“The desire for more privacy and protecting data is rising and a smartwatch could be used as tool to grant more security and address rising consumer concern regarding data privacy,” Mr. Laubier said.
“A smartwatch can track even more personal and more sensitive information than a smartphone, so marketers need to be careful what potential marketing application they want to develop” he said.
“In addition they need to take into account the small screen size which is restricting potential advertising a lot and marketers best practice known from smartphones and tablets might not work out, bringing the need to think out of the box.”
Chantal Tode is senior editor on Mobile Commerce Daily, New York