Swatch Adds NFC Payments and Bank Partnerships in New Smartwatch Strategy

Swatch revealed its strategy to compete with tech companies that are taking the smartwatch industry by storm.

The company intends to launch timepieces with near field communication (NFC) chips. Essentially, this would allow individuals to make payments using some of Swatch Group’s upcoming watches, which may includes brands like Omega and Tissot.

In addition to wireless transactions, NFC technology can be used to unlock hotel rooms, swap data, acquire boarding passes and serve as a digital key for exclusive access.

“We are the world champions of integrating smart functions into a watch. We don’t want to produce a mini mobile phone on your wrist. Others can do that,” said Swatch CEO Nick Hayek.

Moving forward with the plan, Swatch announced that it has partnered with China UnionPay, Swiss Bank, and two unnamed credit card providers to help facilitate the company’s new offering.

Reports indicate that one of the credit card providers that Hayek failed to disclose was Visa.

“It’s a fantastic opportunity for us. It is opening the market. Especially in the U.S., many people are not wearing watches any more. Somebody is opening this up. Let Apple do the work. It’s fine. It’s good. I congratulate them,” highlighted Hayek.

The company is currently gearing up to take on the Apple Watch in two months. Apple’s new device, which will go on sale in nine countries starting April, will also offer payments through its own platform.

Swatch’s first NFC-enabled watch, called Swatch Touch, will debut at $134, almost half the price of Apple’s entry-level model.

Analysts expect the rise in competition to negatively affect the company’s sales by as much as 10 percent from its Swatch brand, and 5 percent from its mid-range line, Tissot and Mido. In total, Swatch could lose a total of $10.8 billion before the end of the year.