• by Sep Seyedi , March 5, 2015

Although not new, mobile payments have resurfaced as a hot trend, thanks in large part to the introduction of Apple Pay late last year. We know wearables have been everywhere the last couple years. It’s a market that has people talking about technology again, aside from smartphones of course.

Let’s take a look at these industries and how their paths could intertwine in the future. When I think of the rate at which the wearables industry has evolved, I instantly liken it to rapid prototyping. Whether that’s a positive or a negative aspect of the industry has yet to be determined.

In the smartphone industry for example big releases are generally made once per year and they’re typically paired with just one or two key technical innovations. In contrast, the wearables market has been evolving on a near monthly basis since its inception. New models, gadgets and features are constantly being thrown into the market, which can make it hard to keep up. In fact, it’s common for wearable tech to have several iterations per year.

For the consumer, the rapid changes can offset a purchase because there is no way to tell when the next iteration of a product will be out. For example, just a few short months after LG launched the G Watch, it released the G Watch R, which features a sleeker, round display. Several other wearable manufacturers are guilty of this as well, so don’t criticize LG too harshly.

Another trend: The once distinct line that separated wearable fitness trackers and smartwatches is now grayed. This is due, in large part to smartwatch manufacturers who have integrated fitness-related features into their products. This will have a huge impact on the fitness tracking industry as it is estimated more than 50% of people who are looking to purchase a wearable will instead opt out to purchase a smartwatch.

It’s also safe to say this trend is fueling more fire to wearable naysayers who have long doubted the longevity of this market. And these skeptics may have a valid argument: the wearable industry was forecasted to sell 90 million devices last year, but had to settle for a total of 52 million. With the influx of smartwatches, is there even a need for standalone fitness tracking devices?

Based on the stats so far, it seems the excess of excitement within the wearables category isn’t translating into sales. When leaving the house, you typically look to have your phone, wallet and keys (not necessarily in that order).

As smartphones begin to edge out the need to carry a dedicated wallet, watches are poised to get in on the action as well. It may be hard to imagine paying for something with your watch. That’s because Apple Watch aside, many brands have yet to talk about- let alone release- a smartwatch that gives users mobile payment functionality.

Apple Watch will serve as an NFC [near field communications] capable intermediary that features a “mini” Passbook app to allow users of fifth generation iPhones (and up) to utilize Apple Pay. The service, however, is not a standalone solution. This means users will still need to have their smartphones nearby to make a purchase.

As we gear up for the release of Apple Watch, it’s safe to assume Apple is not the only smartwatch maker that will enter the mobile payments game. Smartwatches are readily able to feature NFC technology, without any major changes to their current designs. Looking at the bigger picture the convenience of mobile payments and smart watches will be a unanimous success if implemented correctly.

But you don’t have to wait to make purchases via your smartwatch. A few companies have already created apps for Android Wear based smartwatches, such as PayPal, that allow purchases via the watch. Implementing fitness tracking and mobile payments into smartwatches will help advance its position from a gadget-like toy, to a full-fledged mobile solution.