Amidst the wealth of new gadgets, apps and services dedicated to home working, remote healthcare, gaming, autonomous vehicles, virtual (VR) and artificial reality (AR), and smart homes were announcements about the significant increase in the number of people around the world adopting digital payments, particularly on their smartphones.
One of the many speakers at CES 21 was head of financial access at Plaid, the developer of the application programming interfaces (API) underpinning several consumer fintech apps including peer to peer (P2P) payment platform Venmo, robo-advisor Betterment, investment app Acorns and mobile stock trading and investing platform Robinhood. Plaid saw a 44% increase in new users from March to May 2020 compared to the same period in 2019 and believes that 60% more consumers are using more fintech products and services than before the onset of coronavirus.
Payments platform provider Stripe recognises that the pandemic has significantly accelerated digital payments growth, particularly when it comes to expanding acceptance amongst small to medium businesses (SMBs). By August last year, Stripe had processed over US$10bn of payments from businesses newly signed to the platform in the previous six months, with many having moved their operations online for the first time.
New wearables embedded with mobile payment technology
The wealth of innovative technology showcased at CES 2021 offers a glimpse into the apps and services consumers will pay for in the future as well as the devices they will use to initiate complete purchases. That includes new smartwatches and fitness trackers with support for near field communications (NFC) from established manufacturers such as Apple, Fitbit, Google, Samsung and Xiaomi, and fashion brands and watchmakers entering the market for the first time.
Research company IDC has forecast that global shipments of wearable devices (watches, wristbands and ‘hearables’) will hit 396m in 2020, up almost 15% compared with 2019. The research company’s Worldwide Quarterly Wearable Device Tracker predicts that volumes will expand at a compound annual growth rate (CAGR) of over 12% to reach 637m by 2024. By that time 50% of wearables sold will offer support for mobile payments as people warm to paying for physical and digital goods and services using a smartwatch, many of them linked to their existing smartphones and electronic wallet (eWallet) apps.
As the wearable user base expands, sales of fitness apps customised for specific devices are likely to increase in parallel. That was already happening even before the onset of coronavirus according to statistics compiled by App Annie in its 2020 State of Mobile report. It found Fitbit’s health and fitness app was the 6th most popular Internet of Things (IoT) app measured by downloads in the US in 2019, for example. The company also calculated that consumers worldwide spent US$1.5bn on health and fitness apps in the same year, up 130% on 2017 levels and led by China (up 330%) and South Korea (up 570%).
According to the World Economic Forum, that trend appears to have accelerated in 2020 as governments introduced lockdown restrictions that kept millions of people at home. Referencing data from the Global Mobile Consumer Trends 2020 report produced by MoEngage and Apptopia global downloads of health and fitness apps grew by 46% during the first and second quarters of 2020. People sought alternative motivation for exercise gyms and fitness studios closed, and team sports training suspended.
Fitness app downloads in India alone increased by a massive 157% between March and June, equivalent to 58m active users. The average rate of expansion for Southeast Asia, Oceania, and the Middle East and North Africa (MENA) hit 50% in the same period. Most countries also saw an increase in downloads and usage of medical apps (up 39%), particularly pharmaceutical apps as patients purchased and arranged delivery/collection of drugs online.
Health, gaming and streaming media services to drive technology spending
Digital health will not be the only significant contributor to technology spending over the next five years by any means. New habits acquired during extended periods of lockdown are expected to continue well into 2021 and beyond, particularly when it comes to streaming TV shows and movies, and playing computer games on mobile devices.
An annual survey from the Consumer Technology Association estimates that spending on technology during 2021 will rise to US$461bn, up US$40bn over 2020 and buoyed by additional demand for gaming and streaming media services. The CTA’s five-year spending projection estimates that sales of software and streaming media will rise to US$112bn during 2021, up 11% compared to 2020.
McKinsey’s calculation that Disney+ signed 50m subscribers in 5 months, numbers that Netflix took seven years to accumulate is ample evidence of the increased consumer preference for streaming media and subscription video on demand (SVoD) services. But whether they are funding monthly fees for Netflix, Disney+ or Amazon Prime Video; paying to download game titles or additional in-game content; or purchasing fitness and healthcare apps or service subscriptions, consumers will demand a fast, convenient way of completing those transactions.
Some buyers will be happy to input credit/debit card details, and others will prefer to fund purchases through eWallets linked to their bank accounts. But there is also a significant segment of the world’s population, particularly younger tech-savvy buyers, that are happier to fund new tech purchases through their mobile phone accounts via carrier billing.
 CES 2021: Stripe and Plaid reveal Covid-19 ‘pressed fast forward’ on digital payments acceptance, Finextra, 13th January 2021
 Fitness apps grew by nearly 50% during the first half of 2020, study finds, World Economic Forum, 15th September 2020
 CES 2021: Survey predicts consumer tech spending will spike to $461B in 2021, S&P Global, 12th January 2021