According to Mastercard, the wearable technology market will reach the €30bn mark next year as wearables become more mainstream – with one in five adults already wearing a smartwatch or fitness tracker.
As the technology gets smarter, fashion brands are taking advantage of the trend and helping to drive the evolution of the wearables market. From advanced fitness trackers to premium smart watches - from brands like Emporio Armani and TAG Heuer that combine sleek fashion-forward design with high-tech capabilities like water resistance, GPS and contactless payments - both tech and fashion industries are starting to act as extensions of each other as the boundaries between fashion and wearable technology are becoming increasingly blurred.
Financial institutions are embracing the opportunities wearable technology can bring. With wearable transaction volume expected to reach $501 billion by 2020, some banks are increasing the daily limit that customers can spend on their devices, while others are partnering with device manufacturers to enable contactless payments direct from a current account. The potential of wearable payments is growing: Disney has already issued 11 million closed-loop payment and ticketing bracelets called MagicBands, and Moscow metro is offering microchipped bracelets and ceramic rings that can replace normal top-up cards.
While innovations like this are transforming the future of fashion technology, it is important that any collaboration between FIs and device manufacturers brings value to the user – for example, making the payment process as convenient as possible. New technology and fashion brands need to work in alliance to merge the separate concepts of payment wearable, fashion accessory and fitness tool into one.