Wearable Payments Analysis Report : Sizing the Opportunity 3 | Page 3

DEFINING THE POTENTIAL Wearable payments are mainly taking place within the physical proximity of a merchant's POS terminal Eat24's smartwatch app looks to streamline repeat order purchases Wearable payments are in the formative stages, with wrist-based devices the most widely deployed form factor so far Disney's Magic Band provides proof of concept for wearable payments Wearable payment developments intensified in 2015, with the supply side of the market driving much of the activity Apple Watch is the first big effort at enabling payments with the wrist Barclays' bPay range is one of the few examples of payment-only wearables Most payments players are entering the wearables market through partnerships Consumer appetite for wearable technology is positive, but a sizable number are unconvinced of its benefits Wearable device holders are mostly open to the idea of using these devices to pay Outside the current wearable user base, attitudes to wearable payments are less positive Features and price are the biggest drivers of wearable device adoption SIZING THE OPPORTUNITY Consumer behavior and sentiment are at the heart of our Wearable Payments: Early Adopters Model The Wearable Payments Early Adopters Model identifies four target groupings for wearable payment products The banked and younger age groupings demonstrate the greatest early adopter potential 10% of all consumers are ready to adopt wearable payments immediately China has the largest potential customer base for wearable payments Wearable providers need to target the highest-potential demographics The most immediate potential for wearable payments lies within the 25-34 age group High-income earners show the greatest likelihood of being early wearable payment adopters Men and women are almost equally as likely to be early adopters of wearable payments