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NFC wearables market trends 2021: watches, rings, bracelets & keyfobs

Pavel Panayotov 20 November, 2020

Payments with NFC wearables are gaining huge momentum and will continue to do so in 2021. 

Do you want to find out how the market is evolving? 

We will explore how rings, smartwatches, fitness trackers, bracelets, wristbands and keyfobs aim at getting a market share from cash and debit card payments. 

We will see who are the companies that push the trends (Apple, Samsung and many other), what consumers should be aware of and why the technology is poised so aggressively at taking a lasting foothold in the payments sector.


NFC wearables – the big picture

NFC wearables trends


We just very recently reported on the fintech industry trends for 2021 and beyond. One of the shifts was that mobile payments are taking over the contactless cards and cash payments with a compound annual growth rate (CAGR) of 23% from 2019 to 2024.

An extensive new market research forecasts very similar trends for the NFC wearable (Near-field communication) payments – estimating a CAGR of nearly 22% from 2020 to 2027 for a market size growing from $285 billion to $1.37 trillion globally. 

So, what are the reasons for this huge growth and mass adoption?


NFC wearable payments in Europe and beyond

People are rapidly turning heads towards payment wearables, which become part of our daily lives … and our outfits.

In Europe, Mastercard reports that 33% of all wearable transactions occurred within the Netherlands, with the UK (18%) and Switzerland (8%) following in 2019. 

Other countries who are noticeably adopting NFC wearable payments are Russia, Poland, Sweden, Czech Republic, Finland, Germany and Ukraine. 

This is the result of 1 in 5 people wearing a smartwatch or a fitness tracker, making the wearables technology market worth 30 billion Euros in 2020.

Beyond Europe, Australia was the 2019 leader in the number of wearables payment transactions race. The USA is number 8 in the world and all the rest of top ten are European countries, revealing how the old continent plays a major role in adoption trends.

With coronavirus around and scepticism towards touching potentially contaminated coins and banknotes, the time is just ripe for an even faster transition into the habit of paying contactless.


What are the reasons for this widespread switch to NFC wearables?

NFC payment trends


The consumers seem ready for new payment methods that give them speed and convenience, while a trusted brand powers their payments.

But that’s not all.


1. Contactless payment acceptance in-store is increasing

Contactless in-store payments accounted for 61% of all in-store payments in Europe in 2019.

One of the reasons is that there are more than 30 payment-ready wearables on the EU market, but we will explore them in a bit.

Another reason is that almost all of the newly shipped POS terminals in Europe (90% to be precise), are NFC-ready.
Payment Genes reports that 78% of POS terminals worldwide will be able to accept contactless payments by 2022. In 2017, the share stood at only 50%.


2. NFC wearable payments are faster

They take 3 steps less, compared to debit/credit cards – reaching for the wallet, opening it and taking out the card. Let’s not even mention counting cash and coins on both sides of the counter.

Just imagine the alternative scenario: After the total amount due is displayed, you simply take your NFC ring near the reader. Done. 

Not just that, but NFC wearables payments are much faster than cash payments. A study done by American Express found out that “a non-contact transaction is 52% faster than a contact-based payment. Compared to cash, the time saving is even 63%. In absolute terms, inserting a debit or credit card into a reader connected to a cash register followed by the customer’s signature takes an average of 28 seconds. Contactless payment, on the other hand, takes less than 18 seconds in most cases.”


3. The NFC technology is cheap to embed into wearables

By 2020, most debit and credit cards issued around the world are ready to make contactless payments. 

One of the reasons is that NFC chips are very cheap to produce and embed into all kinds of different devices – smartphones, access cards, travel cards and of course the NFC wearables that end-users spend money with.

Large volume orders can reduce the price of NFC chips to under $0.1 each.


Who are some of the key players on the NFC wearables market?

NFC wearables market

Mastercard and Visa, as 2 of the main card processors, integrate with different financial institutions and NFC wearable manufacturers to support tap & pay beyond cards.

Apple offers 3 different alternatives – Apple Watch SE, Apple Watch Series 6, Apple Watch Series 3. They are the perfect match for iPhone users because they work with Apple Pay but at the same time are more expensive than alternatives and many people dislike the 1-day battery life. Another thing to be aware of is that not all bank cards are readily available to get into Apple’s wallet app. iCard’s Visa debit and Visa Infinite cards are one of the easiest ways to start paying with Apple Pay.

Barclays’ Pingit brand offers a huge selection of NFC wearables in the UK – keyrings, fobs, wristbands, bracelets, watch straps and watches in partnerships with brands such as Hugo Boss, Guess, Timex and more. So far, so good, yet the Pingit NFC wearables are only available to UK customers with a UK phone number and any bank account that can receive payments through the Faster Payments network. Lastly, contactless payments are limited to £45 and non-sterling pound purchases are charged with a 2.99% fee if you travel outside the country. 

Fitbit devices are not only for health and sleep tracking, but some models offer NFC payments. Fitbit Pay is available in 48 countries in partnership with different financial institutions and via the following devices: Sense, Versa 3, Versa 2, Versa, Ionic, Charge 3 Special Edition and Charge 4. It is integrated and accepted as a transit pass in London, Vancouver, Sydney, Singapore, Taipei, New York, Chicago, Miami and Portland.

Google is not into NFC wearables manufacturing, however Google Pay, as part of the Android OS, is integrated with well-known watch brands such as Fossil, Skagen, Diesel, Armani, TAG Heuer, Movado, Michael Kors, Kate Spade, Montblanc. The company even partnered with a luxury watchmaker, offering the relatively affordable Hublot Big Bang E for £4,800, which is actually the cheapest in the Big Bang series by the Swiss brand.

Samsung, as an Android device-maker, just like Apple, creates and sells its own series of smart watches which are integrated with the Samsung Pay app. As battery-powered NFC wearables, the Galaxy Watch and Galaxy Watch Active series rely on electricity to pair with your Samsung phone, even with some iPhones. The downside, just like with the Apple Watch is that the battery usually lasts for only a day.  

Other providers and manufacturers of rings, bracelets and other wearables include:

  • iCard – we currently have 2 variations of our stylish NFC keyfob
  • LAKS – rings, keyfobs, bracelets (some of LAKS products are integrated with iCard for users around the European Economic Area – EEA)
  • K Ring – rings with a prepaid account or integrated with KBC bank, ABN Amro Bank and Nordea  
  • Rosan Pay – luxury wearables producer offering bracelets and key rings
  • Amazfit – smart watches producer
  • Garmin – watches that work with Garmin Pay
  • McLEAR – rings with a prepaid account


How to select an NFC wearable and what should you consider?

selection


There are quite a few considerations that you should keep in mind before deciding which is the perfect NFC payment wearable. Next, we’ll see the 2 types of accessories and who are they suited for, alongside some security insights.


The types of NFC wearables:

NFC wearables can be split into 2 categories:

  1. Battery-powered (Active)
  2. Without battery (Passive)

NFC watches are active and most of them will let you authenticate prior to payment. The result is that you can complete any purchase amount with a single tap – no need to enter a PIN.

You should be considerate when relying on an active wearable for payments and make sure you have enough battery to take you through your day.

The passive counterparts (wristbands, watch bands, rings and keyfobs) work slightly differently – like your contactless debit card. This means that every now and then, you will need to confirm a transaction with a PIN, entered on the point-of-sale terminal.

Be aware that in some instances, your transactions might be limited – e.g. the £45 limit per transaction for the UK Pingit wearables.


Personal preferences for the types of NFC wearables

Which NFC wearable would suit your lifestyle? 

With a huge selection of possible NFC wearables that can help you make payments, and not only, selecting the right one for yourself depends on personal style and habits.

Are you the macho type of guy who hangs his keys on the jeans? Then you might simply want to go with an NFC keyfob.

If style is what attracts you, then you might want to go with an NFC ring or a bracelet.

Don’t like wearing rings? No problem, you could opt for a smartwatch that can do much more than just payments.

The options are quite diverse – from jewellery to rubber.

What’s your style? Share in the comments.


Security awareness

Last, but not least, passive NFC wearables, like contactless debit cards, could be copied by fraudsters but don’t worry! We have explained how safe NFC wearables are in another blog article.

To the point, make sure you always have an app that immediately sends payment notifications.

This is exactly what we do at iCard – for all types of incoming and outgoing payments. 


Haven’t tried iCard yet?
There’s much more than just NFC payments!


14

Pavel Panayotov

As a Communication Manager, Pavel is engaged with creating user journeys and presenting iCard to the world. Contributions include education, activation and engagement strategies, as well as unified cross-channel product and brand awareness campaigns. In his free time, Pavel enjoys keeping up with innovations, marketing trends, friends, family and nature.

More posts by Pavel Panayotov

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