The Future of Wearable Payments

Editor’s Note: This blog entry was originally published on October 11, 2017, and was updated on May 28, 2020.

The Current State of Wearable Payments

Wearable tech devices such as Apple Watches and Fitbits have been gaining in popularity in recent years. But how do payments fit into the wearables ecosystem?

Research indicates that global sales of wearable devices are expected to hit over $1.1 trillion in the year 2026. As cash and check usage have started to decline over recent years, and consumers are now adopting NFC technology with more regularity and using their smartphones to make contactless payments, it is likely the use of wearables to make payments will also increase.

Transit systems and retailers around the world have made progress in installing the infrastructure to be able to accept NFC-based and QR-code-based payments from wearable devices. Many events, such as festivals and concerts, have also started using wearable devices for customer convenience.

As wearables become more widely used, more is constantly being learned about the advantages and disadvantages of using them for payment transactions.

Advantages of Payments-Enabled Wearables


Payments-enabled wearables provide customers additional secure payment options other than credit or debit cards.


Wearable devices such as smartwatches or smartrings allow for the convenience of easy mobility and making quick “on-the-go” purchases. They can help purchasers who need to limit what they carry, such as joggers on a run or customers attending large events where bags are limited or prohibited.

Expansion Potential

Wearable devices have the potential to become a “one-stop-shop” for housing multiple types of information in one place. Some automobile manufacturers have already created apps that allow users to unlock and start their cars remotely using their smartwatch. Disney’s Magic Band not only includes payment functionality, but also functions as a hotel room key and a ticket to ride attractions.

Disadvantages of Payments-Enabled Wearables

Limited Use

The majority of current mobile wallets and payments-enabled wearables function on a “closed-loop” system, meaning they can only be used at one merchant or a chain of merchants, such as certain transit hubs or coffee shops. Many are designed to be used at certain events or locations only, such as Disney World’s Magic Band.

Smart Payment Association research expects that as the volume of payment transactions from wearable devices increases, that retailers will move away from the closed-loop system to an “open-loop” solution, which can be used in multiple environments rather than just one. Some change is already being seen in this area, such as Target’s announcement in early 2019 that it would start accepting Apple Pay®, Google PayTM, and Samsung Pay®.

Security Misconceptions

Some consumers have security concerns with mobile payments. One recent survey found that 65% of respondents said that security concerns would keep them from making payments with a wearable device. However, companies that produce wearable payment devices can help alleviate these concerns with security measures such as tokenization, biometrics, transaction limits, or the use of a PIN, which makes mobile payments just as secure as any other form of payment.

Needed Infrastructure

Payments-enabled wearables require point-of-sale terminals that can process NFC transactions. While the initial rollout in the U.S. was slow, Berg Insight predicts that more than 88% of the world’s point-of-sale terminals will be NFC-ready in 2024. This will allow more merchants to accept payments from wearable devices.


Independent software vendors (ISVs) need to offer their clients a robust payment processing solution that accepts the payment methods customers want to use to pay - including mobile payments and payments made through wearable devices. Global Payments Integrated supports over 150 different payment methods. Contact us today to learn how to offer these options to your clients.

Apple Pay® is a trademark of Apple, Inc. All trademarks contained herein are the sole and exclusive property of their respective owners.
Google PayTM is a trademark of Google, Inc. All trademarks contained herein are the sole and exclusive property of their respective owners. Any such use of those marks without the express written permission of their owner is prohibited.
Samsung Pay® is a registered trademark of Samsung Electronics Co., Ltd.