How Mobile Payments Might Work on the Apple Watch

Apple announced on Tuesday that consumers will be able to undertake transactions in stores utilizing their Apple Watch, eradicating the need for cash or plastic cards. However, the tech giant left unanswered the question of how it plans on ensuring the security of these transactions. Although the Apple Watch shares the same Near Field Communication (NFC) technology as the iPhone 6 – requiring users to hold the watch face close to the store’s payment terminal according to information on Apple’s website – the watch itself lacks a fingerprint sensor for authentation purposes.

This vagueness about security for payment resonates as a paramount concern, particularly since the security benefits of the fingerprint identification feature played a large role when Apple launched its Apple Pay system. Apple did not furnish a comment when queried about this issue, yet Ed McLaughlin, MasterCard’s executive for mobile payments hinted that the watch might make use of other biometric information from the wearer to establish unique identification using the Apple Watch’s four sensors designed to track the wearer’s heart rate.

“It will able to identify you uniquely,” McLaughlin stated in an interview, emphasizing the advanced capabilities of the watch. He further intriguingly suggested, “There are more efficient ways to fingerprint you even without an actual fingerprint,” refraining from providing further explanations.

Visa CEO, Charlie Scharf, also assured that the watch will have adequate security. “They understand the risks and have a solution for that,” he said, referring to Apple.

It’s plausible that users will be required to enter a PIN code to finalize a purchase, notwithstanding the fact this would introduce another step to a payment method that is advertised as being exceedingly straightforward.

While the watch won’t hit the stores until 2015, the lack of information on security measures, following as it does in the wake of celebrity iCloud hacking and high-profile security breaches at retailers like Target and Home Depot, is curious.

*This article was updated in 2022 to reflect modern realities.*