Is your smartwatch going to drive the next digital payment revolution?
The contact-less payment through wearable devices such as watches and rings is continuously increasing. Can they turn out to be a new pillar in the digital payment ecosystem?
“Can this smartwatch make payments for my purchases?” Asked a man to the sales guy at a retail outlet while he was showing some amazing features of the watch and we were overhearing the same.
“Of course sir. You can do almost everything which your mobile phone can do including payments through your saved debit and credit cards.” He replied with a gleam in his eyes as if he was proud of something he was selling. The conversation between the two continued forward on other features but it certainly left a point to ponder on how these wearable devices can drive the next revolution of payments landscape.
Over the last few years, digital payments have been forerunner in our economy with a whopping 25.2 billion digital transactions done over the last year. Without a doubt, the digital payment ecosystem is more convenient and secure, but at the same time, the role of pandemic in acting as a catalyst cannot be ignored. And as this COVID wave is sweeping ahead, there’s a growing inclination towards payments being not only digital but contactless too which has given birth to a new star - your smartwatch.
Remember NFC technology – the same one which was used to be flaunted by Blackberry phone users (ofcourse when they were too much in) for quick data transfer? The same near field communication technology (NFC) has now enabling our wearable devices like smart watches and rings to process payments digitally, swiftly and in truly contactless manner. The wearable device gets linked to ones’ debit or credit card and for making the payment, the user just needs to take the device closer to the point of sale(POS) terminal with TADAA – payment processed in a jiffy. No touching of card or any surface required and no verification through a PIN needed.
This NFC technology enabled payment methods can be 10 times quicker than traditional methods. With a chip enabled card, a payment transaction can take around 45 seconds to be completed, however with the wearable device, the entire transaction can be completed in as less as 10 seconds. That’s being super quick isn’t it? Furthermore, one needs not to worry if their wearable device can read some other customer’s payment and process that because NFC terminal ensures to activate payment when there is a minimal distance between the device and POS terminal.
While the trend of wearable devices is increasing continuously among our populace because of being tech savvy and fashionable, their utility as a payment processor is giving them a greater purpose. For sure, brands like Apple and Samsung can definitely take a lead in this race of having an evolved technology and better security as compared to their peers, but payments through wearables are here to stay. The adoption of wearables as a payment mechanism has been quick in the western counterparts but would definitely catch up in the emerging markets too gaining prominence not only because of elitist breed but also because of an ardent need.
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By: Anmol Gupta | Isha Garg