The future of payments is on your wrist: an analog watch is enough

Online payments with watch

From the earliest credit cards in the shape of a metal plate developed in 1930 to the ability to pay using an analogue clock. The epidemic has expedited the financial sector’s evolution, and the future of payments is now in your hands. You may pay with the same ease and convenience as glancing at the clock.

In reality, smart timepieces (smartwatches) have long provided this feature. In a continual digitization process like the current one, no organisation wants to lose out on this sort of solution, which may also provide benefits. But not everything is about the development of technical items; solutions that allow analogue resources to be converted to the digital age are also implemented.

This is precisely what the Swiss company Swatch Pay! This initiative is already implemented in countries such as Germany, Switzerland, Italy, Finland, Poland, or Denmark , without having reached Spain until now. In the same line, expressed the general director of Visa in Spain, Eduardo Prieto, who assured that “this trend of payments is consolidating worldwide”.

Future of online payments
Source: eleconomista

The company has brought this initiative together with CaixaBank and Visa with the aim of having the opportunity to make payments with its analog watches. This was recognized by the country manager of Swatch Group Spain, Gonzalo de Cevallos, who assured that “we put the client at the center of the strategy. We must listen to their needs”.

Why is this initiative emerging now? In Europe, more than 80% of payments are made without contact, and in Spain this figure is much higher. According to a study by Minsait Payments, a subsidiary of Indra, contactless payment in Spain has grown by 10% during 2021. More specifically, 74% of Spaniards prefer the card as a payment method over cash.

CaixaBank forecasts suggest that in 2022 mobile payments will continue to rise and calculate that, by the end of the year, 2 out of 10 card operations will be carried out with mobile terminals or wearable devices . It is introduced by CaixaBank, a bank that manages a park of 33.4 million credit and debit cards and has more than 33% market share.

Comfort and tranquility

“We want payment to be easy, safe and comfortable, as well as practical for day-to-day use,” assured Eduardo Prieto. The analog clock does not need memory or an internet connection or to be near the card, and of course, the battery does not run out, which opens the door to a range of possibilities, since for example, if you are on the beach there is no need to carry the credit card with you.

Once the watch is linked to a card, you can withdraw money from the ATM, review banking operations through the bank’s application, and can be used anywhere in the world, as long as they accept Visa and have devices to contactless payment .

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With all this, CaixaBank becomes the first Spanish bank to participate in this wave of technological innovation. Purchases with Swatch Pay! they follow the same requirements as any contactless card , that is, it will only be necessary to enter the PIN number of the downloaded card when the amount of 50 euros is exceeded or when the POS so requires for security.

How far will we go?

The ‘Payments 2025 & Beyond’ report estimates that by 2030 electronic payments will triple in the world, reaching more than three billion operations. It will be Asia that leads this growth. An increase of 109% is expected in this region until 2025.

In some countries, payment infrastructures are already being promoted by the governments themselves as a policy to control money flows. All this translates into a proliferation of domestic payment platforms such as Mir in Russia, Elo and Pix in Brazil, and Troy in Turkey.

The commitment to payment methods is being maximized with the most sophisticated technological innovations. An example would be the use of biometrics (recognition of individuals based on fingerprints, face and iris) to authenticate operations . Funcas’ 2021 report ‘Biometrics at the service of payments’, already hinted that the future of payments resided in our facial characteristics, something that makes us unique. In that study, they estimated that two billion dollars would be allocated by 2023. The development of these means of payment consists of biometric cards that, instead of needing a PIN number, would only require the contact of the fingerprints on the front of the card.

But the engine of this innovation does not stop here, but is committed to other payment media. In addition to the possibility of using the mobile and the watch to make purchases, there are initiatives that put ” plastic money “ in bracelets, rings and even clothing.

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