Alternative payments methods
Some alternative payment methods (APMs) or alternative methods of payment (AMOPs) are essentially another way of paying apart from using cash. Cash usage in some regions continues to drop, for example in Sweden as they journey towards a cashless society. [1]
And although differing methods have existed for some time – credit and debit cards for example, which are said to have been introduced in the 50s and 60s respectively, we’re reaching an exciting new dawn in payment trends, with the global pandemic being the catalyst. There were 13.1bn contactless payments in 2021, equivalent to 415 transactions every second. [2]
Digital-first behaviours originated or compounded during the pandemic have led to an increased use of online banking and a shift towards contactless payments.
Contactless payments have increased 36% vs 2020. They’ve seen an even bigger increase of 52% compared to pre-pandemic levels in 2019.
This increase in contactless payments for convenience, safety and because people have changed behaviours and not phased back, has opened the door for more opportunity in this arena.
Here we look at wearables as part of our alternative payment trends series and see how you can keep ahead of the curve, delivering your customers the propositions they need.
Wearables – the next trend in payments
Wearable payment devices are payment appliances that can be adorned on the person and it’s likely we’re all familiar with them. From smart watches to payment rings, to bracelets and sunglasses, they provide an alternative way to pay other than a physical card, not to be confused with the colloquial term ‘wearables’ - the umbrella term for wearable technology.
The wearable payment devices market is predicted to grow at a CAGR of 29% during 2022-2032, with an estimated market valuation of US$ 13.43 billion in 2022. [3] That’s an incredibly valuable area to be a part of.
Why now for wearable payments?
One school of thought is that the advancement of technology, coupled with an increase in customer desire for convenience and contactless payments following the pandemic, means this is a golden time for wearable payments devices.
Global popularity
It’s not just the UK that’s seeing an increased use of general wearables - the global wearables market hit a new peak in Q4 [4] as shipments reached 171 million units, up 10.8% from the same quarter in 2020, according to IDC.
Number of connected wearable devices worldwide by region in 2021 in millions [5]:
- Asia Pacific 258.2
- Central and Eastern Europe 55.6
- Latin America 39
- Middle East and Africa 37.5
- North America 378.8
- Western Europe 159.7
References
[1] https://www.globalprocessing.com/news/blog/swedens-2023-cashless-goals
[2] https://www.altfi.com/article/8970_2021-was-the-biggest-year-of-contactless-payments-yet
[3] https://www.prnewswire.com/news-releases/global-wearable-payment-devices-market-to-top-us-171-bn-by-2032-factmr-report-301485062.html
[4] https://www.electronicsweekly.com/news/business/wearables-2022-03/
[5] https://www.statista.com/statistics/490231/wearable-devices-worldwide-by-region/
