This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.
2016 is a milestone year for the financial technology (fintech) industry. For starters, technology giants - the likes of Apple, Samsung, and Google - began a mobile payment race, each launching their own mobile payment app. However, in the meantime, issues such as data breach, identity theft, and fraud also came to the fore, serving as a stark reminder that security should be an integral part of any technological development society is adopting.
Moving into 2017, we foresee a few key trends that would reshape the financial industry in Asia Pacific. This article outlines the most transformative ones to watch.
1. Contactless payment is fast replacing traditional payment methods
Today, 70% of the world's consumers are using EMV cards, which feature a smart chip instead of the traditional magnetic stripes. Newer contactless iterations even support "tap-and-go" payment for small transactions.
Such contactless EMV is being implemented massively for both debit and credit payment across the world. Out of three billion EMV cards delivered in 2015, over one billion were contactless. 24 million1 contactless point of sale (POS) terminals were in service over the same period, too.
Currently, Asia ranks second in global contactless payment usage. 70% of all smart payment cards shipped in this region featured contactless technology. In addition, 90%2 of all newly issued cards in China are contactless-capable.
Contactless cards in circulation will grow from 1.7 billion in 2016 to 6.2 billion1 in 2020, representing 50% of all payment cards in 2020 globally. There are now also more diverse ways to pay contactless, through Near-Field Communication (NFC) phones and wearables. Payment methods are increasingly creative and delivering new user benefits and experiences.
2. Wearables are the next big thing for payment devices
The wearable market is all set to take off. According to a report, it is potentially worth a staggering US$25 billion, accounting for over 245 million devices sold in 2019. Consumer awareness of wearables has skyrocketed globally, with many of them chasing after the next new stylish offerings like Apple Watch and Samsung Gear.
Besides the present smart watches, wristbands, jewellery, and rings, newer wearables will emerge in 2017. In fact, the next wave of wearable technology is likely to be invisible to the naked eye, such as smart clothing by the courtesy of pioneers like Hexoskin, and smart contact lenses from Google.
Manufacturers of wearables will just need to integrate an embedded module or active chipset to make their products ready for contactless payment. By further incorporating biometric, voice-, and motion-sensing technologies, we expect more advanced financial transactions and new use cases to follow.
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