The well-worn payment device

SmartwatchNow and then a product comes along that, seemingly overnight, proves indispensable, even though we had seemed to manage quite well without it before. The automobile comes to mind. So does Egg McMuffin. And, for a while, fidget spinners.

But at least people could readily grasp what automobiles, McMuffins, and fidget spinners were good for. This year marks the ten-year anniversary of a now-ubiquitous device initially greeted with a mix of curiosity, enthusiasm—and bafflement—as to why, exactly, anyone would want much less need one.

I refer to none other than iPad. On April 3, 2010, Apple Stores throughout the country opened their doors to lines of customers who had camped outside, eager to score one of the new tablet thingies on Day One. Observers weren’t sure what to make of the campers or of the device. Exactly one week later, NPR news-quiz show Wait Wait Don’t Tell Me quoted Steve Jobs’s diminutive description of the device (surely one of many times Apple’s marketing department wished they could muzzle him): “I’ll let you in on a little secret,” Jobs had said. “It is just a big iPhone without the phone.” When the call-in participant revealed that she happened to number among the first wave of iPad owners, host Peter Sagal quickly followed up, “It’s amazing. Immediately we go from like, you know, posture of mockery to, ooh, you have one?”

All posture of mockery was short-lived. iPad, I hardly need point out, was a hit. Not that it was the first tablet to come along. Many a lesser creature preceded it. Among these were Kindle, whose functionality at the time was limited to displaying books; and Palm Pilot, which was cool because you could hot sync it to your computer. But iPad’s versatility readily eclipsed them all.

Then, for a followup, along came a new Why-On-Earth-Would-Anybody-Need-That product category. Namely, smart wearables—such as watches, wristbands, and earwear. 

A few weeks ago,  PYMTS.com said:

The wearables global market is on track to ship 305.2 million units in 2019, up 71.4 percent from the 178 million units shipped in 2018. About 69.3 million smartwatches are expected to ship this year.

The growth of smartwatches as a category is encouraging for the payments industry, because a growing number of them support contactless payment via Google Pay. Warable.com lists 23 of them. As for contactless payment via Apple Pay, the number of smartwatches that support it is precisely what you would expect: one. I bet you can guess which one that is.

Encouraging as the growth of smartwatches is, and with it the growth of contactless payment via smartwatch, the leader in the wearables category is—drumroll please—earwear. MarketWatch reports:

Accounting for the majority of shipment volumes throughout our forecast is earwear, which is set to reach 139.4 million units this year and nearly double to 273.7 million units in 2023.

By “earwear,” MarketWatch isn’t referring to any old pair of ear buds or headphones. Rather:

For an earworn device to be considered a wearable by [International Data Corporation]’s definition, it must offer functionality beyond audio, like a smart assistant, health and fitness tracking, or audio experience enhancement.

I regretfully observe that “contactless payment” is patently absent from the above list of earwear capabilities. Perhaps that’s because, for security purposes, RFID chips must hover within an inch or so of readers, and few shoppers wish to contort themselves in order to rest an ear on a scanner.

Eclipsed though the smartwatch may be by earwear, MarketWatch projects that its future is nonetheless favorable:

69.3 million smartwatches will ship in 2019 and total volumes will reach 109.2 million units worldwide in 2023. Apple’s watchOS will remain in front throughout our forecast by a wide margin and function as the measuring stick against which all other smartwatch platforms are compared. Still, there is room for other platforms to grow: Android will have a strong following with kid-focused smartwatches; Samsung’s Tizen will cater to Samsung smartphone owners with features rivaling watchOS; and Google’s WearOS will benefit from having the longest list of hardware partners and the addition of Fitbit OS’s health and fitness capabilities.

For those inclined to ask what will they think of next?, perhaps it will be the contactless payment ring. In 2014, Hackaday writer James Hobson reported on a fellow who dissolved his RFID card in acetone, removed the chip, and reinstalled the chip with a new antenna on a ring. But don’t hold your breath. Until banks start issuing payment rings, anyone who wants one will have to DIY it. Not that I recommend trying. Indeed, more cautious DIY sites suggest obtaining—just in case—a duplicate card for experimentation purposes.

Meanwhile, Amazon is fast at work on the ultimate wearable. Ultimate, in that it’s a device that most of us already wear. Partnering with Visa, Mastercard, JPMorgan, and Wells Fargo, Amazon “plans to enable customers to connect their credit card information to their palms,” reports Finextra, “so they can complete purchases with a tap of their hand rather than their card.”

That’s palm as in hand, not tree. Though who knows? Maybe smart potted plants are next.

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