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Wearables for Payment

Periodic Reporting for period 1 - WEAR_n_PAY (Wearables for Payment)

Reporting period: 2015-12-01 to 2016-04-30

The infrastructure to enable contactless payments is now widely deployed in Europe, all point-of-sale terminals will accept contactless payments by 2020. Furthermore, the recent launch of Apple Watch including payment functionality, has raised enormous interest on contactless payment from wearables. Thus, the momentum is created for innovative companies to change the payment habits of young citizens, based on improvement of convenience and security.
WEAR´n´PAY services correspond to the development and production of customised payment wearables with the highest security standards, in fashionable designs and materials. Our model is B2B, offering payment wearables to our clients (bank entities) thus not competing in the B2C market with on-the-shelve products, in the short-term. Our solutions integrate multifunction contactless chips so that they can also be used for transport access, loyalty cards and couponing, user´s membership cards and ticketing. Our multifunction wearables have the major operational advantage of being universal (mobile-operator independent) thus they can be equally used by all citizens, which is very important for facilitating agreements with public administration (i.e. transport managers) and other providers (airlines, retailers, etc.). Wetech has delivered bank-issued wearables for contactless payment and is developing wearables to be issued by the end-user through an authorised bank app, based on tokenization.
Wetech is one of the first enterprises in the world delivering payment wearables. Wetech is at an excellent departure point for a successful exploitation of this market niche, expected to grow at an excellent CAGR of 177% over the next years, up to a 1.000M€ EU market by 2022.
In this project we have undertaken a global feasibility assessment of the technical, promotional, commercial and financial aspects of a business model devoted to the design, production and commercialisation of wearables for payment that effectively engage young people with the traditional banking sector. For the first commercialisation year, we consider a B2B model (serving bank-issued wearables for payment) and subsequently also a B2C model enabled by our novel technology for end-user issued wearables for payment.
This feasibility assessment has included a thorough validation of the customers´ interest on these product, on their perception of value for money, and their valuation of our core differentiating factors. Wetech proposes disruptive innovations to launch wearable payments that can. Our developments bring advancement in aesthetics, achieved by our unique combination of fashion and technology experts, and enabled by our cooperation with the leading global chip providers. Wetech also focuses on strengthen convenience, as one of the key benefit of wearables to succeed as a payment method. Our contactless wearable have no battery, they are always readable which we deem as essential in a payment method. Our wearables integrate multifunction NFC chips, enabling that it can also be used for transport access, loyalty cards and couponing, user´s membership cards, tickets, etc. Furthermore, our model is to implement multifunction on top of payments, thus the bank is the catalyser to bring on-board other non-competing service providers (i.e. Airlines for boarding passes and membership cards; Ticketmaster for ticketing; major Retail Chains for loyalty and couponing). Since payment is the strongest functionality, users start with a wearable for payment (only) which is subsequently upgraded with other extra functionalities as other service providers are on board. This over-time upgrading process is eligible, as hardware capacity to storage multisource functions is embedded on our wearable, and their activation can be done at any time, directly by the user and via the service provider´s app. In operational terms, the bank value the possibility to include other non-competing services for their payment wearable to become even more useful to their clients. Finally, the other essential feature is security. Wetech is currently using the standard certification process for bank-issued cards.
The main result achieved in this Phase 1 project is to define Wetech strategy for leveraging our international growth, with WEAR´n´PAY as our flagship service and main revenue driver. We have delivered a complete feasibility assessment of our WEAR´n´PAY services where most efforts have been devoted to market & competition assessment and the consolidation of a detailed commercialisation plan, where key technological partnerships with global suppliers of payment methods have been achieved.
Wetech is at an excellent departure position for successfully exploiting the market niche of wearables for payment, thanks to our unique combination of expertise in technology and jewellery, to offer high quality solutions with premium aesthetics.

The expected potential economic impact of this project is for Wetech to serve a target market of €250million by 2020. The global Wearable Payments market, expected to grow from $3.1 billion in 2015 to more than $500 Billion in transaction volume annually by 2020 (Tractica market report, July 2015). They estimate that 1% of total cashless transactions in retail will be done from wearables by 2020, thus corresponding to a total of 5 million payment wearables rolled out in Europe in 2020. On the other hand, the global market for wearables in 2020 is forecasted to 190 million units (Analysys Mason market report, July 2014). Europe represents a 20% of this global market, thus 38 million units. Therefore, 5 million payment wearables would represent a 13% of the EU wearable market by 2020.
Our project´s expected societal impact is to contribute to a shift in the consumer habits, from cash to electronic payments, as it is one of the major goals of the Single Euro Payments Area (SEPA), for preventing money laundry, for increasing technological progress and for reducing a substantial cost. The EU Directive on Payment Services was recently revised to “contribute to a greater usage of payment cards instead of use of cash” . Nevertheless, cash is still the predominant payment method in Europe. Only in UK for first time in 2014, cashless payments overtook the use of coins and notes. Experts forecast that cash volumes will fall by 30% by 2025, with contactless and mobile payments as major drivers.
Wearable for payment: bracelets in a variety of designs and materials
Wearable for payment: strap for smartwatch
Wearable for payment: strap for traditional watch
Wearable for payment: bracelet