Payments with wearables on the rise in Europe
Transactions via wearables have increased eightfold in just one year. The Netherlands leads Europe in usage, with Switzerland in third place.
The use of wearables for payments continues to grow in Europe. More and more consumers are using the relatively new payment method in their everyday lives for fast and uncomplicated payments. This year, the number of transactions using wearables increased eightfold compared to 2018.
The trend has successfully caught on in Europe: Payment-enabled wearables are now already available in 26 European countries - with a range of over 30 different devices.
In Europe, the Netherlands is the leader in the area of payments with wearables: One third (33%) of all contactless payment transactions were made there with wearables. The United Kingdom (18%), Switzerland (8%) and Russia (7%) follow in second to fourth place. This includes both active wearables, i.e. smart wearables, and passive wearables, such as wristbands, rings and normal wristwatches.
Top 10 countries in Europe for payments with wearables
- Netherlands
- United Kingdom
- Switzerland
- Russia
- Poland
- Sweden
- Czech republic
- Finland
- Germany
- Ukraine
Worldwide, the most transactions with wearables were made in Australia, followed by the Netherlands in second place. The USA takes eighth place. All other countries in the global top 10 are European. Overall, payments with wearables have increased sharply in Europe this year. The total number of European transactions was almost twenty times higher than in North America.
Technology meets fashion
As wearable technology matures, it is now the fashion brands that are ushering in the next stage of development in the market. They are designing wearables that are primarily high-end accessories beyond mere function. Currently, one in five adults wears a smartwatch or fitness bracelet.
By 2020, the global market for wearable technology will be worth an estimated CHF 33 billion. In addition, wearable payment functions enable a simple and convenient payment process by tapping or swiping.
Contactless catches on
Consumers can use wearables wherever contactless payments are accepted. Contactless payment has established itself internationally as a game changer in payments and is becoming increasingly popular with card issuers, merchants and consumers, especially in Europe.
In this context, the adoption of contactless payments continues to grow: 61% of all European in-store transactions are contactless, an increase of 23% since the beginning of 2018. Contactless payments in retail also increased significantly from 42% to 70 % in the same period. This strong adoption paves the way for payments via wearables.
Peter Bakenecker, Divisional President Germany and Switzerland at Mastercard, says: "At Mastercard, we expect new payment methods to catch on quickly. Consumers want to be able to pay faster and more conveniently, provided the service provider is a trusted brand. It's remarkable to see how quickly consumers are moving to new innovative payment technologies that fit their digitally connected lifestyles. Wearables offer greater convenience and simplicity while providing the trust and security they need."
Passive and active wearables
A wearable, for example a ring, bracelet or smartwatch, is equipped with NFC (Near Field Communication) radio technology. Once it has been linked to the wearer's debit or credit card, the wearable can be used to make contactless payments in the same way. There are passive and active wearables. With a passive wearable, such as a ring, the transaction is authorized by entering the PIN code at the payment terminal, just as with a plastic card. With active wearables, such as a smartwatch, the PIN can be entered on the wearable itself and the transaction completed by simply tapping on it.
