The global wearable payment device market is projected to grow from $43bn in 2021 to $82bn by 2026, at a CAGR of 13.6%, according to a report from Research & Markets.

The growth of the wearable payment device market is majorly driven by surge in the adoption of contactless cards and wearable devices due to the Covid-19 situation, emerging demand for contactless payment for secure and safer payment transactions, and the growing adoption of NFC technology.

Covid-19 has emerged as a global pandemic that has spread over 215 countries worldwide and disrupted various industries around the world. The prominent players across industries have been affected by this pandemic. However, the pandemic may have positive impact on the wearable payment device market.

With the ongoing pandemic, there is a rise in the adoption of contactless payment methods due to the rise in health concerns. This is anticipated to increases the demand for smart watches with payment functions in the coming years.

Smart watches held the largest share of the wearable payment market in 2020. In recent years, smart watches have NFC technology integrated into them to enable mobile payments. Manufacturers such as Samsung (South Korea), Apple (USA), Fitbit (USA), Xiaomi (China) and Garmin (Switzerland) offer smart watches and other wearables with payment-enabled features.

In terms of shipment, smart watches accounted for the highest number of shipped units of devices integrated with mobile payment functions in 2020 globally. Covid-19 is anticipated to increases the demand for smart watches with payment functions in the coming years.

Their use in retail and grocery stores is expected to grow at the highest CAGR during the forecast period. Consumers have been using contactless payment through wearable devices for billing in retail and grocery stores, as they are convenient and allow the consumers to keep a record of their transactions. With Covid-19, consumers are increasingly veering away from handling cash due to the fear of spreading the disease.

According to a National Retail Federation survey, 67% of retailer respondents accepted some form of no-touch payment in 2020. Also, several retailers across the world are investing in contactless payment technologies to keep customers safe. Thus, the market for retail and grocery stores is expected to grow at the highest rate during the forecast period.

The wearable payment device market in Apac is expected to grow at the highest CAGR from 2021 to 2026. The region has prominent players of wearable devices. The manufacturers in China and India offer wearable devices at a low price, making them affordable for customers. Many international players get their wearable devices manufactured and assembled by local manufacturers based in the region and then brand their names.

The region holds many highly populated countries, which account for the high adoption rate of consumer electronics. Covid-19 has accelerated the rise of the digital economy, particularly contactless payments. This, in turn, is expected to increase the demand for wearable payment devices in Apac.