Singapore’s Market For Portable Payable Devices
Asia is rapidly evolving into one of the largest markets for electronic consumer devices and portable payments. Key markets in South East Asia, such as Singapore, are reshaping consumer trends leading the charge for technology adoption. Some of the key segments that have seen these trends include the banking and payables sector.
Wearables payment devices, otherwise known as portable payment devices, are a notable trend whose roots have been going deeper in the west is also thriving in Singapore. Companies like Tappy and MasterCard are the pistons that are powering the engine of payment devices in Singapore’s wearables landscape.
Singapore’s portable wearables market has so far demonstrated immense potential, and that is why MasterCard and other key players have set up shop. They believe that the segment will achieve a lot of growth over the next three to five years. Ben Gilbey, the Senior Vice President of Digital Payments at MasterCard, believes that the market for wearable portable payable devices will balloon to around 400 million wearables in the next two years. This figure is only smartwatches and wristbands, and the card company is convinced that the demand for such devices will skyrocket, and much more can be achieved in Singapore.
Aggressive companies in the field
Many companies have so far demonstrated their interest in the wearables, and we have seen different approaches. For example, Fitbit has carved itself quite a strong reputation in the fitness wearables segment. Companies such as Apple, Samsung, Huawei go toe to toe against each other with their smartwatches that also have some important health and fitness features. This means that major corporates have also identified the wearables segment’s potential and have already invested heavily in it.
Over the past few years, we saw the launch of services such as Apple Pay for the Apple Watch, Samsung Pay for Samsung Smartwatches, Garmin Pay on Garmin smartwatches, and Google Pay for Wear OS. These companies have also been working towards getting more businesses to accept payments through their payment services. The more merchants that get on board, the easier and more convenient it will be for users to make payments using portable payable devices.
One particular company to look out for is Tappy courtesy of its interesting approach to portable payments. It is a company whose role in the payments cog is to facilitate or enable the integration of card platforms and bank partners into wearable hardware. It has a partnership with MasterCard through which they plan to merge fashion wearables and digital payments.
The collaboration will leverage MasterCard’s tokenization technology with contactless pay. This means that contactless payments might be incorporated into more wearables other than smartwatches and fitness bands.
The target market
It is important to first look at what the portable payable devices can achieve so that we can understand the target market. For example, having the contact chips integrated with wearables means that they can be fitted into a variety of devices, which include bracelets, bands, smartwatches, or even rings. This means that the target market could all types of people, especially those that are open to digital payments.
Portable payable devices offer the convenience of not having to carry money on you and also not having to carry a credit card. Thanks to Tappy, one can have a digital credit or debit card on their smartwatch or smartphone, which means that they can serve a dual purpose. They can, therefore, appeal to all types of users, whether young or old, male or female. The wearables can also be tailored to fit personal preferences.
Since most of them are watches and fitness trackers, they will fit in perfectly with current lifestyles that many Singapore residents find appealing. This means part of the target demography will be people who are health-conscious who use smart devices such as smartwatches and fitness watches to keep track of their health.
According to Statistica, about 41% of Singapore’s population did not own or use wearable technology in 2019. Roughly 33% had an activity or fitness tracker while 16% owned a smartwatch. About 10% owned both a fitness tracker and a smartwatch.
The wearables market in Singapore is expected to generate roughly US$17million in 2020, and it is expected to maintain an average of 5.7% annual growth rate. So far, there are about 300,000 people in the country who use wearables. User penetration currently stands at 5.5%, and it is expected to climb to 5.6% by the end of the next four to five years.
Two main forces will likely fuel more adoption of wearables in Singapore. The first is the fact that wearable tech is considered as luxury, and so more people purchase them as a show of wealth and status. People want to be seen with the latest Samsung smartwatch or the latest Apple Watch. The second major factor is the utility factor with the inclusion of payment services. The latter is particularly a good selling point for wearables that will hopefully encourage more people to purchase wearables.
MasterCard’s partnership with Tippy is also expected to pan out well since the two are reliable and influential brands. The collaboration is good for publicity, and the two are working towards achieving uniformity for the devices in the tokenized network. Tokenization is a smart move because it will eliminate the need for customer data to be stored in any of the devices.
Partnerships such as that of MasterCard and Tippy are a great step towards the right direction for the entire wearables segment. It will likely encourage more collaborations between wearables makers and financial companies. Singapore is one of the ripe markets that are experiencing a surge in demand for wearables, and as such, it is also a good market for wearables that are fitted with portable payment tech. The country might offer a lot of opportunities for businesses, but the clear winners will be the customers, especially with the different types of wearable tech that will be launched in the market.