50% of consumers in mature markets to use phones, smartwatches for mobile payments by 2018

The acceptance of mobile payments in countries such as Japan, North America and some Western European countries will lead to 50% of consumers in such mature markets using a wearable device or their mobile device to make payments by 2018.

Three types of mobile payments or wallets were identified by Gartner, namely smartphones or wearable tech, branded mobile wallets from banks or credit cards and branded mobile wallets from retailers.

However, rather than mobile payment wallets that are tied to a device, Gartner forecasts that cloud-based solutions will have a better rate of adoption as they are able to “reach a wider audience and can support many use cases beyond face-to-face or in-store options”.

Last year, a report on wearable payments from Tractica predicted transaction volumes will increase significantly over the next five years rising from around $3.1billion in 2015 to $501.1billion by 2020 and accounting for about one-fifth of all mobile transactions and 1% of all cashless payments in retail.

“Wearable payments are just getting started. Apple Pay for the Apple Watch is the first big effort at enabling payments with the wrist. Soon to be launched, Android Pay and Samsung Pay are other prominent digital wallet solutions that will support smartwatch payments,” says Tractica research director Aditya Kaul.

“Key early market initiatives include trials and deployments of Barclays’ bPay system in the United Kingdom, Swatch’s partnership with UnionPay to enable wearable payments, Alipay’s partnership with Xiaomi in China, and Disney’s successful deployment of its MagicBand closed-loop payment and ticketing system at its theme parks, among others.”