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Wearables will likely push payments sector forward

May 9, 2016

The rate at which payments technology has changed in the last year or more has been considerable, and more efforts to get those multi-purpose devices out into the world are now being made by tech giants.

The rate at which payments technology has changed in the last year or more has been considerable, and more efforts to get those multi-purpose devices out into the world are now being made by tech giants. Consequently, payment processing companies are likewise moving to keep up with that trend. They’re giving consumers the sort of purchasing flexibility they may be seeking based on whatever wearable devices they may have.

To that end, major payment processors like Visa and MasterCard are now focusing on bringing more types of wearable technology into the payments fold in the near future, according to a report from Digital Transactions News. MasterCard in particular is now pushing a “Commerce for Every Device Program” that it believes could be ready to go before the end of the year. It could potentially give a far larger number of people access to this type of payment.

“Our platform is an open system that supports a wide range of wearable devices, which allows device makers and card issuers to reach a much broader audience,” Sherri Haymond, senior vice president for digital payments for MasterCard, told the site. “Not every consumer wants to use their smartphone to pay and many consumers want different devices to perform different tasks. Our goal is to make payments a plug-and-play application for makers of wearable devices.”

Widespread use of wearable payment technology is coming soon.Widespread use of wearable payment technology is coming soon.

What does this mean?
Right now, while millions of Americans have devices capable of making a mobile payment, they are mostly limited to people with certain types of smartphones and Apple Watches, the report said. But with these new efforts, the pool of potential users could expand to include those with fitness trackers such as FitBit wristbands, or even people who are now buying clothing with wearable technology embedded in it.

Moreover, many companies that make wearable devices are now doing so in close conjunction with payment processors, in hopes of maximizing the value consumers get out of these projects, the report said. That, too, should help push the use of this technology forward.

“We are seeing a lot of interest from device makers,” Haymond told the site. “As more devices are approved for use on our network, consumers will begin to embrace them. There is already a lot of buzz about wearable payments technology on Twitter.

A growing trend
Within the next few years, it’s expected that there will be about 340 million wearable devices worldwide, up from just 22.7 million at the end of 2014, the report said. More than 9 in 10 are expected to be watches and wristbands. However, even now, only about 1 in 8 wearables in the market can be used for payments.

Certainly, this is a trend that is only going to gain steam, and as such merchants should be prepared to get involved as soon as possible. The earlier they can adopt mobile payments technology that can handle these purchases and more, the better off both they and their customers are likely to be going forward.

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