MASTERCARD AND WIRECARD PARTNER ON WEARABLES: Mastercard is extending its partnership with major European processor Wirecard to promote contactless payments on wearable devices using boon, Wirecard’s digital payment app, according to PYMNTS. The partnership will initially go live in Germany, and will enable users of Garmin Pay, Garmin’s wearable payment platform, to make purchases on a digital boon Mastercard using an eligible Garmin smartwatch. And the firms are reportedly working on upcoming projects related to wearable payments. The companies partneredin December 2017 for Wirecard to offer access to Pay by Bank, an ACH-based payment solution offered by Mastercard-owned Vocalink, to all of its online merchants.
This partnership can allow the firms to hold a strong position as wearable payments approach mainstream adoption.
- Wearable payments have been gaining traction. Wearable payment devices are expected to make up 20% of all contactless payments by 2020, equating to roughly $501 billion in volume globally, according to a Tractica forecast. Mastercard has been moving in on that opportunity: The firm partnered with Fitbit last year to offer contactless payments on the Fitbit Ionic smartwatch, and it integrated payment capabilities into Garmin’s Vivoactive 3 smartwatch in the US last year. Expanding their partnership to more markets throughout Europe can accelerate wearable payment popularity in regions where users are already attuned to contactless, as it will give users the opportunity to spend at more places with their devices when they travel and form habits around them.
- But Germany might have more adoption barriers than other regions. Although cash usage has been declining in Germany, it still made up 74% of total transactions last year, with contactless transactions holding less than 1% of total transactions. That might point to a disinterest among consumers in adopting digital payment methods. But it also indicates a long runway for growth and innovation, which several firms are recognizing. Google Pay, for example, just launched in Germany, marking the first phone-based mobile wallet to arrive in the country. While adoption might happen slowly, Mastercard and Wirecard could hold an early mover advantage in the space if consumers continue to move away from cash and toward other payment methods like wearables.