Swiss watch-maker Swatch is launching a smartwatch with contactless payment functionality, which is expected to be available around the time Apple releases its own IT-enabled watch in April.
The traditional maker of watches, including the Omega brand, will launch a smartwatch in the next three months.
“Functions will include communication, mobile payments at stores such as Migros and Co-op, and applications that work with Windows and Android. The upcoming Swatch smartwatch will be able to connect to the internet – without having to be charged,” said Swatch Group CEO Nick Hayek.
As technology companies such as Apple and Google increase their reach in new markets, non-technology companies are being forced to change to protect their market share. Financial services firms are among those investing in wearable technology to keep pace with changing consumer demand.
For example, Spanish bank CaixaBank released contactless wristbands following a pilot of the wearable technology with selected customers. The bank is using Gemalto’s Optelio Contactless MiniTag, which allows customers to make contactless transactions at hundreds of thousands of payment terminals across Spain.
Nationwide customers are able to check their bank balance on smartwatches if they have already downloaded the building society’s mobile banking app. The firm partnered with IBM to develop a system to allow Android Wear users to perform banking tasks on their wearables. The smartwatch will connect to the mobile banking app to provide users with real-time updates of their balance.
The much-anticipated Apple Watch could allow consumers and enterprises alike to receive phone alerts and make contactless payments without having to take out their phones.
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"Apple will legitimise and create the mass-market wearables category. Smartwatches shouldn't be an exercise in screen miniaturisation – instead, they should help users to interact with the physical world more effectively,” said J P Gownder, vice-president and principal analyst at Forrester, in September..
“With NFC, Apple Pay and health and fitness monitoring, the Apple Watch interfaces with retailers, healthcare providers and the human body to create a value proposition that's different from simply pulling a phone out of one's pocket,” said Gownder.
But research released in October 2014 found that using watches equipped with near-field communications (NFC) technology to make payments is not popular in Europe.
“In America and China, there is openness for using smartwatches as identity cards and payment systems, but Europeans are much more hesitant about these functions,” it said.
The survey of 1,000 smartwatch owners in China, Germany, South Korea, the UK and the US, carried out by marketing firm GfK, said people are using smartwatches to carry tickets for passenger transport or as security keys to their computers and online accounts. It also said the ability to transmit healthcare data via a smartwatch is also of particular interest to the majority of people.