Swatch in Smartwatch Payment Deal With Visa
November 30 2015 - 8:00AM
Dow Jones News
ZURICH—Swatch Group AG Monday announced a partnership with
payment services provider Visa Inc.—a significant step for the
Swiss watchmaker as it attempts to break into the growing market
for smartwatches.
Biel-based Swatch, the world's biggest watchmaker, said it had
signed an agreement with Visa to provide cashless payment for its
new Swatch Bellamy watch— its answer to Internet-enabled devices
produced by Apple Inc. and others.
The pay by wrist function is planned for the watch, which will
be launched in the U.S. Switzerland and Brazil from the start of
2016, Swatch said. The watch, which will sell for 90 to 100 Swiss
francs, uses near field communication technology which allows
devices to exchange data and enables cashless payment.
The Swatch Bellamy is Swatch's entry into the smartwatch space
dominated by Apple, Samsung Electronics Co and others. The
world-wide smartwatch sales are expected to grow from 7 million
units in 2014 to 650 million by 2020, according to estimates by
Smartwatch Group, a consultancy.
Many of these sales are expected to be at the expense of
traditional watches, whose sales are forecast to fall by around $2
billion this year and $7 billion in 2016, Smartwatch Group has
said.
Swatch, with its range of lower prices watches below the $1,000
price barrier is considered to be among the more vulnerable of
Swiss watchmakers, with concerns weighing on the company's stock
price that has lost nearly 18% this year.
At 11.30 GMT Swatch shares were trading 2% higher at 364.7 Swiss
Francs.
Analysts welcomed Swatch's agreement with Visa, which follows a
similar deal with state-run China UnionPay Co. for the Bellamy in
the massive Chinese market.
The Visa deal "is an important milestone for Swatch, as it
responds to forays by technology leaders in its category," said
Luca Solca, an analyst at Exane BNP Paribas.
Write to John Revill at john.revill@wsj.com
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(END) Dow Jones Newswires
November 30, 2015 07:45 ET (12:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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