Wearables and Mobile Payment

Can smartwatches and convenient wearable-apps push mobile payment at the POS?

Soon, thanks to their pro-active responsiveness and convenient handling, ‚wearables‘ could accompany us unobtrusively in everyday life. In that, Dr. Thede Consulting and the BVDW (Bundesverband der Digitalen Wirtschaft) agree. With the collaboration of TC, several experts from BVDW member companies have developed five theses for the future of wearables.

Wearables are to date the most intimate end device to bridge the distance between human and technology and to act way more intuitively than any other device so far. Above all, smartwatches and fitness wristbands as a ‚body extension‘ will become an integral part of natural movement. Accordingly, complex and thus very conscious processes in many areas of life will become considerably easier. Thanks to this simplification, wearables, especially smartwatches, could promptly establish themselves as the key day-to-day companion. Especially authentification-, access- and measurement-processes will become noticeably less complicated, e.g. opening of carsharing vehicles, ticket purchase in public transportation, timekeeping at work and building access, but also mobile payment.

First approaches for mobile payment applications already exist today. Next year, Swatch and Visa will jointly launch a smartwatch with payment features (faz). Apple is even one step ahead and has already equipped their Apple Watch with an NFC chip, which is established as a payment device for Apple Pay in the US and Great Britain, soon to be launched in Australia, Canada, Spain etc. (Apple/ Digital Trends).

Using your smartwatch, the mobile payment process is purely intuitive and very convenient, as no smartphone has to be pulled out of the pocket, no app has to be opened and no PIN or touch-ID is requested. A simple Tap-and-Go with the wrist is enough. Thus, the willingness and motivation of the consumer to use this payment method is very likely to increase. A potentially crucial factor is the required reduction of the screen size and the resulting strategic focus on minimal interaction and maximal context relevance. That way, a vibration alert prompts questions such as „Would you like to collect bonus points for your purchase?“ or „Your parking time will expire in 10 minutes, would you like to renew for another 60 minutes?“. An answer is simply provided with another tap.


“Mobile Payment will become foolproof, quick and handy. Supplemented with beneficial add-ons, e.g. added value, these features could finally provide the long-awaited use for the customer and ultimately find their way into consumer’s daily life. This could mean the breakthrough for mobile payment in Germany. We therefore recommend to market players in the payment transaction industry that they closely monitor the technological developments and the distribution of wearables, especially smartwatches, and the accompanying new applications, in order to be able to integrate these into their product and channel strategies in medium-term.”

Andre Standke, Dr. Thede Consulting


At the same time, the use of wearables generates a substantial amount of data. Principally, these are sensitive health data, movement- and geo-data, which can be assessed for the benefit of new services and products in order to provide additional use and value for the customer.


“Obviously, the consumer’s privacy concerns have to be addressed. Transparency is crucial in this respect. It can be seen that consumers are generally open to provide their data, even health data, save these on their device and even pass them on. Often, only the playfully generated added value, sporty competition or group dynamics to reach specific fitness- or health targets are enough for this openness.”

Jens Hegeler, Dr. Thede Consulting


Our preliminary conclusion: The digitalisation of retail banking and payment is forging ahead. Even in banking, data-based business models and thus the use of ‚Smart Data‘ (focused use of relevant data based on profitable ‚use cases‘) are more and more coming into focus. Wearables, especially smartwatches, can take up a leading role as ‚enabler‘ for mobile payment or as the ‚ultimate smart data device‘ in the current challenges ‚digitalisation‘ and ‚smart data usage‘.

More trends, how wearables are bound to shape our everyday life and most likely change existing business models, have been compiled by the experts of the BVDW member companies in five theses. The entire collection can be found here.


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