The new way to pay: What are wearable payment technologies?

1 November 2018
Wearable and mobile payment technologies are becoming increasingly available nationwide – are they a gimmick, or part of a long-term shift towards a cashless society?

Australia could be considered a world leader when it comes to contactless payments, also known as tap-and-go. According to the Reserve Bank of Australia’s (RBA) most recent data, cards overtook cash as the most popular method of payment for the first time in 2016, accounting for more than half of all payments in the country. Around two-thirds of these card payments were contactless – a massive increase since 2013, when less than one-in-four card payments were contactless.

But whilst card payments are on the rise, they’re not the only method of tap-and-go payment – the same technology is now being added to other portable electronic devices; these include mobile phones, payment stickers and more recently, wearable tech.

What are wearable payment technologies?

Wearables (as they’re often dubbed) refer to any piece of technology you can wear on your body, such as fitness trackers, smart watches, wireless earbuds and even VR/AR headsets. These can do many things from monitoring your heart rate to providing you with phone notifications, and an increasing number now allow contactless payments.

Just like your contactless credit or debit card, wearable payment devices contain a Near Field Communication (NFC) chip, which is like a simplified version of Bluetooth. This NFC chip contacts the chip in the card reader at the point of sale, allowing them to verify each other and make the transaction.

While the tech is similar, wearables and smartphones could be more secure than paying via card in some cases. Wearables or mobile phones store your card details in a digital wallet app – such as your banking app, Apple Pay or Google Pay – which encrypts your card details, and doesn’t share them when you make a payment. Phones can also be locked, for example, by using a passcode, fingerprint or face identification.

Who offers wearable technology for payments?

Wearable technology providers are starting to break through and innovate in a number of forms, including in smart watches, smart jewellery, fitness trackers and more. In terms of what’s happening with wearable tech and payments, there are a few key players worth keeping an eye on:

Westpac wearable devices

One example of how wearable technology has moved into the payments space is Westpac’s PayWear – a wireless, wristband-mounted chip linked to a Westpac bank account.

It uses the same technology as your debit card to make contactless payments, meaning you can use it without needing your wallet or phone. It’s also battery-free and waterproof, giving you the ability to make purchases in many situations when you’d rather not carry a card or cash.

Fitbits, Garmin smart watches and more

While Westpac has chosen to develop its own wearable technology, there are many third-party wearable manufacturers who have partnered with banks to add payment support to their products.

Fitbit has introduced Fitbit Pay to its smart watches and has partnered with several major banks, including ANZ and NAB; Commonwealth Bank supports payments via Garmin smart watches; and multiple banks have struck agreements with Apple Pay and Google Pay to allow customers to pay via their smartphones. Bankwest has even introduced Halo – an NFC-enabled ring which lets you make payments by fist-bumping a contactless payment terminal.

Are wearable payment technologies the way of the future?

Just as contactless cards have grown in popularity recently, wearables look to be the next step towards ever-more convenient point-of-sale payments.

Tractica, a technology-focused market research firm, predicted in 2015 that wearables will account for more than US$500 billion in worldwide transactions by 2020, making up roughly 20% of all payments made via smart devices – up from just $3.1 billion in 2015.

Given this rising popularity, we thought it was worth considering some of the possible pros and cons of using wearable tech.

Pros of wearable payment technology


As if tap-and-go payments using your card weren’t convenient enough, wearables could mean you don’t need to remember to carry around your card in the first place – the payment chip is always with you, and in some cases, it’s waterproof and could be more durable than a credit or debit card.

More retailers on board

More retailers are starting to provide tap-and-go payment terminals. According to Westpac, 96% of all restaurants and 93% of all grocery stores nationwide provided contactless payments in 2017, adding to tap-and-go technology increasingly becoming the payment norm for many Australians.

Cons of wearable payment technology


Some wearable technology can be expensive to own. If you are looking to invest in a Fitbit and use the payment functionality, for example, that could easily set you back around $300 (according to prices currently listed on the Fitbit website). If you’re more interested in using Apple Pay with your wearable tech, the newest Apple Watch Series 4 has a starting price of around $600 (according to prices currently listed on the Apple site).

Privacy concerns

At a time when privacy and data concerns are at the forefront of many people’s minds, it’s certainly worth considering how your privacy could be affected by using wearable technology. Taking the time to read through the privacy policy associated with your wearable device, as well as checking your privacy settings could make all the difference to keeping your private data private.

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