For Mobile Payments, Wearable Computing Will be the Real Game-Changer

Mobile payments have made a lot of headway in recent years, but it’s still, in a lot of ways, a very young and very niche technology.

That, however, may be about to change as another early-stage technology is advancing forward, one that poses a significant opportunity for synergy with mobile payments. That technology is wearable technology, and the two together may pose a game-changer for the field that’s impossible to ignore.

Those who follow the wearable technology front know that it’s a field that’s made a lot of gains, and is starting to break out of the rut of “fitness trackers and not much else” that it’s been in for some time.

Indeed, IDC reports suggest this market will jump fully 133 percent just in 2015, and there’s a potential growth of 510 percent on this front in the near term. That in turn represents a clear possibility for mobile payments to overcome one of its biggest problems: convenience.

We’ve heard about the value of convenience in mobile payments in the past, and that’s where wearables can offer a great advance. Right now, mobile payments don’t necessarily represent much of an improvement over cash or other payment methods. It’s a different way to make a payment—and as such there’s a clear appeal—but it’s not necessarily better, and so it’s limiting the appeal beyond those who crave novelty.

That’s changing, of course, and in a pretty rapid fashion. We’re seeing a host of mobile payments apps geared toward individual businesses that come with access to a loyalty program right out of the gate, and that’s going to be sufficient inducement for a lot of people to make the move to mobile payments for at least some things.

If that keeps up, it’s going to be a good move for mobile in general, but it’s still not going to be truly sufficient to get people away from all the other options.

Wearable technology has a great potential to help here, as wearables help ensure that people have the device in question used for a mobile payment along with them. It’s one thing to forget a phone, but it’s entirely another to forget some breeds of wearable device. So with the device along for the ride, convenience is assured.

The two big issues left—according to a recent report from MasterCard—are flexibility and security. While there’s only so much that mobile payment system builders can do about the flexibility—businesses do a lot of the determining on that, though the move to EMV might change things a bit—the security can be addressed with proper protections.

Thus, wearables can help provide that extra note of convenience that should help give mobile payments some extra ground. It won’t be everything that mobile payments really needs to take off, of course, but it will be a big part of the equation: convenience.

With flexibility and security in tow, meanwhile, mobile payments should be able to hold their own in the field.