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TRANSCRIPT
Wearables Webinar
Are wearables here to stay?
27th August, 2015
© Edgar, Dunn & Company, 2015
Confidential 2
Payment transaction volume on wearables
will reach $501 billion by 2020
Wearables in payments is making headlines globally with predictions of exponential growth
Source: Tractica 2015
Which is a predicted compound annual growth rate of
177% for transaction volume
20% of total mobile proximity transaction
volume by 2020
$3.1 billion expected to be transacted on
wearables by end of 2015
Global wearables
market will top 187 million devices shipped
annually by 2020
Wearables is a crowded but nascent market with many new concepts and devices being launched across the globe
Confidential 3 Source: Business Intelligence
Wearables is a crowded but nascent market with many new concepts and devices being launched across the globe -‐ continued
Confidential 4
bPay -‐ UK ¡ Launched by Barclaycard earlier this year with a sticker (£14.99), a wristband (£24.99) and a key fob (£19.99)
¡ Available to all UK card holders, not restricted to Barclaycard customers ¡ Linked to a digital wallet which is linked to a mobile app
Nymi -‐ Canada ¡ Biometrically authenticated wristband that uses wearer’s unique cardiac rhythm to verify their identity
¡ Trialed by Royal Bank of Canada and TD Bank in collaboration with MasterCard
¡ Other Canadian banks to trial later this year ¡ Aimed at more than just payments – secure access to laptops, buildings, cars, etc.
¡ Halifax UK to trial the band for online banking access
Wearables is a crowded but nascent market with many new concepts and devices being launched across the globe -‐ continued
Confidential 5
AlfaPay -‐ Russia ¡ Launched by Alfa Bank in conjunction with MasterCard ¡ Watches supplied by Austrian company Watch2Pay ¡ Costs $87 which includes the watch, a plastic card and chip for the watch
¡ Alfa Bank has also trialed linking a savings account with a wearable exercise tracker – rewarding those customers with higher levels of exercise with higher interest on their savings
Tap2Pay -‐ Lebanon ¡ Launched by Bank Audi in conjunction with MasterCard ¡ Chip-‐based technology – chip is inserted into the watch or bracelet
¡ Limited to 10 transactions per day with a daily limit of $1,000 for security purpose
¡ First mass market launch of payment based wearable's in the region
The Apple effect – the launch of the Apple watch and Apple Pay is likely to generate interest wearables and mobile payments
The "Apple effect" – expectations that this will be a tipping point for contactless payments and Apple’s launch is likely to help rival products ¡ Increased interest in Samsung Pay and Samsung watches
since launch of Apple Pay ¡ Increased interest in bPay devices
3 million watches sold in the first couple of months
1 million credit cards registered in first three days of launch
Cost of watch ranges from $349 to $10,000
Can register multiple cards in passbook
Card numbers are not stored on the device or on Apple servers – Apple created a unique Device Account Number which is encrypted and stored in the secure element within the device
Confidential 6
Wearable success stories have so far been in closed-‐loop environments
Wearables have many uses in closed environments
Access into events/buildings, etc.
Locker access
Payments
Tracking patrons movements
Safety and security
Queue reduction
Confidential 7
Saracens rugby union club
Confidential 8
Disney’s MagicBand is considered to be one of the most successful examples of wearable technology
The MagicBand is designed for multiple uses
Disney’s $1 billion investment has ensured the MagicBand is easy to use and integrated into their app resulting in incremental spend
Confidential 9
Ease of use Integration with App
90% of users rate it excellent or very
good
4% incremental spend per visitor
Parks and resort revenue rose 8%
11 million bands issued
Multiple use
Confidential 10
There are many challenges that stand in the way of growth, such as:
Adoption and enrollment
Usage and acceptance
Security of devices and the transaction
Cost of devices
The fight for body real estate
Are wearables in payments here to stay or are they just a phase?
Confidential 11
Improved consumer experience – developing an environment that will result in a frictionless experience
Multiple applications with a single device
Integration with smartphone
Integration with existing apps
Extensive data analytics which could enhance the customer experience ¡ Location ¡ Health tracking ¡ Fitness tracking ¡ Transactional data
Wearables may also provide addition insight into customer behavior
However, there are indications that wearable technology can be successful
Confidential 12
Any questions?
Don’t forget to use the chat pane on the right hand side to send in any questions and select send to “All Panelists”
Confidential 13
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