Swatch to launch mobile payments watch with Chinese banks

This deal was actually struck up earlier in March, with Swatch’s CEO Nick Hayek stating that the company planned on integrating more smart features into its watches and its bands, with NFC being a prime example of that. “In China, Swatch has partnered with UnionPay, China’s bankcard association, to activate the innovative and easy-to-use system, and with Bank of Communications, where customers will be able to purchase the new watches”.

Swatch Group AG, the world’s largest watchmaker by revenue, is going head-to-head with Apple Inc.to develop the next generation of watches in China. Swatch will also be teaming up with Bank of Communications, one of China’s big-five banks.

The watch naturally doesn’t connect to the Internet or a mobile device, so the NFC chip is mostly used for identification and authentication, much like a credit card would. As for why would the Chinese market opt for a regular watch instead of a more fancy smartwatch?

Traditional watch makers have not been so eager to jump head on into the smartwatch buzz but the advancement of mobile payment might be giving them second thoughts.

Wearable devices could top $32.2 billion in sales by 2019, up from $18.9 billion a year ago, estimates researcher IHS, whose forecast includes devices like hearing aids. Swatch, however, while still mulling over a proper smartwatch product, does have a stopgap solution to that. The company’s Tissot brand has made watches with touch-screens since 1999 that now offer an altimeter, a compass, and sensors to record a diver’s descent. UnionPay, once the nation’s monopolized payment network, faces rising competition from third-party payment service providers including Alibaba Group Holding Ltd., while foreign firms such as Apple and Samsung Electronics Co. are also eyeing the Chinese market.