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Wearable Payments

Implementation Considerations for Contactless Payment-Enabled Wearables with Secure Elements

Publication Date: July 2020
Version 2.0

According to American Express, ‘An emerging “golden age” of payment methods is giving individuals and businesses the convenience to pay in more ways than ever, wherever they may be.’  A key component of this new age will occur by making payments easier, faster, and frictionless using wearables. Wearables fall into two main categories: passive devices – such as key fobs, wristbands, rings – that require no battery or smart phone to make a purchase; and active devices which are battery-powered – such as Apple Watch.

Wearables transaction volume is expected to grow rapidly as the consumer becomes more comfortable with ‘tap-n-go’ technology.  Payment transaction volume on wearables will reach $501 billion by 2020, growing at a compound annual growth rate of 177 percent and representing 20 percent of total mobile proximity transaction volume, according to a report from Tractica.

This market growth for connected devices that can be used for a variety of functions presents opportunities for device manufacturers, service providers and the payments industry. Payment-enabling wearables can make payment easier and more convenient for consumers.

The Secure Technology Alliance Payments Council developed this white paper to provide a high-level overview of the landscape for payment-enabled wearables and to discuss key technology and deployment considerations for industry stakeholders. Since wearables are being developed with many form factors and technologies, the payment enablement processes can vary significantly depending on the device and technology selected. To provide concrete guidance for implementers, this white paper focuses on a subset of wearables and payment processes that encompass the most common wearables implementations today.

This white paper’s scope includes:

  • Wearables that support contactless transactions using technology that complies with ISO/IEC 14443
  • Security based on hardware secure elements
  • Provisioning models that use a broad range of technologies (e.g., WiFi, Bluetooth, over-the-wire, trusted service managers (TSMs))

Note: Version 2.0 of the white paper updates market information, application examples, wearables implementation models, and wearables provisioning standards.

About this White Paper

The Secure Technology Alliance Payments Council developed this white paper to provide an educational resource on the wearables landscape focusing on ISO/IEC 14443/secure element-based implementations and to discuss key considerations for implementing payments in wearables. Participants involved in the development and review of the updated white paper included: CPI Card Group; Discover Financial Services; Fiserv; G+D Mobile Security; Infineon Technologies; Ingenico; Mastercard; NXP Semiconductors; SHAZAM.

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