Will smart watches and glasses drive mobile payments?

Consumers could soon pay with their watches and check bank balances via Google Glass.

Are wearable payments really more convenient?

While wearable devices could move mobile payments forward, tech analysts say the future is not certain.

At best, wearables “provide a slightly different way to do something that could already be done,” says Ovum’s Ubaghs.

“There are use cases, but there is no killer application yet that is going to spur a major take-up aside from the usual tech fans and early adopters.”

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In addition, Ubaghs says hands-free payment systems using Bluetooth and cloud on smartphones might render moot any convenience advantage for paying with a wearable.

“There is a lot of potential for wearables to grow, but by no means is it a logical next step and it could easily be bypassed.”

IBRS analyst Guy Cranswick shares Ubaghs’ scepticism.

“The assumption is that if it is faster it will be more appealing and induce more use,” he says.

However, while wearables may allow for faster payments than other methods, people are not complaining about the speed of paying with cash, and success may depend more on overall convenience and the network of places where payments can be made, he says.

Actual use of wearables for payments may also depend on the type of purchase and the age group, with people under 30 the most likely to adopt this form of payment, he says.

“A wearable may act as a catalyst for some payments and among some age groups, but the difficulty here is that we are looking at future behaviour based on a technological feature and we can't know how that will turn out, soon, or over a longer time period.”

Ubaghs says smart watches will lend themselves better to mobile payments, at least initially.

“Watches and wrist bands which can tap a reader to enable payment are far and away the more likely initial form factor for wearable payments due to the fact they interact easily with existing contactless infrastructure.”

“Things like Glass however will need more development on the acceptance side as well and deeper integration into POS systems and services.”

Economics could be problem for Glass, he adds.

“The fact a glass payment is likely to be an over-the-air payment means it will get processed as a card not present transaction, and drive up fees for merchants even though the consumer is right there in front of them.”

Cranswick notes that there remains plenty of work needed to educate consumers that they can make payments using any kind of mobile device, even smartphones.

As evidence, he points to a current PayPal ad posted throughout Sydney that reads, “You may not know all the places you can use PayPal.”

“As a former ad man it’s obvious what the marketing problem is,” says Cranswick. “The market is not aware of where and how they can use the product.”

“It's a network and awareness problem which technology cannot change instantly.”

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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