The 2015 global retail banking study published by Misys and Efma revealed 82 percent of bankers believe smart watches will facilitate financial transactions in the future. That should come as great news to Swatch and Visa, as they just formed a partnership to deliver NFC financial transactions using the Bellamy line of watches from the Swiss watchmaker.
The viability of smartwatch payment systems was not seriously considered until Apple (News - Alert) introduced its line of smartwatches in 2014. Since that time, traditional watchmakers as well as technology companies have been announcing payment options in their watches, and Swatch is one of the companies to do so.
The partnership with Visa will make the technology available in the US, Brazil, and Switzerland in early 2016. However, Swatch has also formed partnerships with China UnionPay and Bank of Communications to provide contactless payment "by-the-wrist" to China. Swatch introduced the Bellamy in October of this year, and the system is already being used there.
The move was unexpected by many industry insiders, as most were expecting Apple to beat everyone to the lucrative Chinese market.
The Bellamy line of watches, which were named after American writer Edward Bellamy and his vision of world where cash is replaced by credit and debit cards, will have built-in NFC (Near Field Communication) technology. Just like smartphones with the same technology, all a user has to do is place their watch over a POS enabled with NFC to start making payments. The NFC technology works by communicating using high-frequency radio waves over short distances.
As consumers feel more comfortable with mobile technology and the security that is being implemented in the system, mobile payment is seeing increased adoption. A report titled, “Mobile Payment Solutions: User Interfaces, Mobile Wallets and Banking 2015 – 2020” by Research and Markets in July of 2015, revealed the market is expected to grow at a CAGR of 20.4 percent over the next five years.
According to the research firm, it will account for $830 billion by the end of the forecast period. The growth is being driven by the convenience the technology provides not only in developed countries, but also developing nations that don’t have financial infrastructures in place to provide banking services.
Edited by Kyle Piscioniere
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