Swatch’s smartwatch that will enable payments from Visa cardholders in the U.S., Switzerland and Brazil is set to launch in early 2016, the company confirmed.
Details about the Swatch Bellamy smartwatch partnership with Visa and Visa Europe were initially reported last week (Nov. 24), but the partners involved released an official statement yesterday (Nov. 30). The “pay-by-wrist watch,” as its been coined, initially rolled out in China through a deal with China UnionPay in October 2015.
A Reuters report last week was the first sign that Swatch was officially joining the wearable payments market as CEO Nick Hayek said the company signed a contract with Visa in relation to its smartwatch that’s going to be equipped with payments technology. Hayek confirmed in the report that the Visa deal would ensure a partnership for its Switzerland market, noting that the U.S. Swatch deal would come soon after.
The best selling point for Swatch is that this NFC payments-enabled smartwatch doesn’t cost nearly as much as any smartwatch on the market. At a retail price of about $91, that’s hundreds below what both Samsung and Apple offer in the wearable payments market. Plus, it looks like a regular watch.
But the race to win over Chinese consumers with wearable payments devices isn’t limited to Swatch, Apple and Samsung. Alibaba is also reportedly creating deals with watchmakers to make it so Alipay can get its share of the smartwatch payments market, too. Swatch may also launch two types of wearables, one specifically with NFC ability that would be compatible with both Android and Windows phones.
There are plenty of other wearable pay players that have yet to make a dent in the market. Barclays has bPay, which has been relatively quiet in the headlines since it launched in July. And then there’s American Express and its Jawbone deal, which hasn’t quite made its way into the market, but has a NFC payments band in the mix, too. And, of course, the Apple Watch, which hasn’t taken off as expected either.
So what motivates a company like Swatch to be part of the mobile payment race? Perhaps it’s the ability to fill a market niche with a cheaper option that still acts as a functional watch.
Reports in 2015 had pegged it as the year that “wearables really take off.” But that’s what’s been being said for the last decade about mobile payments and they have yet to do so, despite the many players in the market.
One forecast from Tractica estimates that the wearables market will grow to 187.2 million units by 2020, resulting in a 34-percent growth rate for wearable devices over the 17 million units sold in 2013. Smartwatches, they predict, will outpace fitness trackers during the same five-year time period studied.
Another way Swatch may stand out in the wearable payments market is how it protects consumer data. In a news briefing about the launch last month, Hayek noted: “We don’t want to connect to a cloud,” which is notably different than Apple’s devices. Instead, Hayek said the company wants to avoid its smartwatches being reliant on the Internet for payments security, and it doesn’t want to have to rely on electricity to keep those watches ticking.
That means no Wi-Fi, no Bluetooth and no Internet, which means possibly protecting the consumer better.