Apple Pay on the wrist: How Apple’s watch gets around the ID problem

Apple only gave a fleeting demo of how contactless payments would work on its new Apple Watch at its Spring Forward event on Monday, but it was an impressive one. You select a card from Passbook in the watch interface and then tap the wearable device against it or wave it over the payment terminal and, presto, your credit card is charged. The watch emits a tone and a vibration to show the transaction has gone through.

Furthermore, according to reports from the event, Apple Pay doesn’t always need to be manually activated in the watch. If you move your hand close to a near-field communications (NFC) based terminal, the app will immediately become active and use your primary credit card for payment — most likely the terminal’s NFC radio “wakes up” the NFC chip along with the Pay app in the Watch.

There also doesn’t seem to be any passcode or other ID authentication necessary. Most retailers will ask for signature –– after the EMV transition this year, many will start asking for PIN codes –– if the purchase is over $20 or $25, but Apple seems to removing every other barrier possible to a simple tap-and-go payments in its new wearable device.

But how does Apple do this with compromising security? Rather ingeniously actually. The Apple Watch appears to use its other sensors to make an indirect ID. Last week at Oracle Arena, Apple head of internet software services Eddy Cue explained that the watch senses when you put it on and then asks for authentication, which you can give either by supplying a fingerprint on the iPhone 6 or 6 Plus. If you’re using an iPhone 5 or 5s, which don’t support Apple Pay directly, you can enter a PIN code in the phone’s app or on the watch itself.

After that, as long as the Apple Watch is clamped to your wrist, your authentication is valid in Apple Pay. But as soon as the watch detects that you’ve removed it, Apple Pay locks up, requiring you to re-authenticate to re-activate it.

Apple Watch Pay

This means you won’t be handing your wristwatch to your waiter to pay your check, but most people probably don’t want to see their new $350-plus fashion accessory disappear behind the bar anyway. Short of a desperate criminal cutting off your hand at the forearm, it’s a pretty full-proof system: Apple Pay is active when the watch is on your wrist, and it’s nullified when the watch comes off.

What’s particularly interesting to think about is how this kind of variable authentication might be used to validate different types of transactions in the future. Anyone who has ever shopped with a piece of plastic knows that different levels of security come into play depending on what and where you’re buying. For instance, self-service gas stations typically ask for your zip code at the pump. Signature requirements kick in at a grocery store if you rack up a high enough bill. And if you’re making a big dollar-amount purchase, a clerk will often ask to see a picture ID.

Apple could fit different levels of Apple Pay authentication to those various retail security policies and then offer them up as options to merchants or payment processors. For instance, any purchase under $25 may not require any additional verification beyond a wave of a wrist. A more expensive purchase that would normally require a signature could be handled with a PIN code entered on the watch, instead of a John Hancock with a pen. A very expensive transaction could require Touch ID verification on the phone and a PIN number to boot.

I don’t know about you, but if I’m about to pay a $900 bill with my watch, I don’t mind jumping through a few extra hoops. On the other hand, I do get really annoyed when I’m forced to go through four or five different screens on a drug store’s payment terminal when all I’m doing is buying a stick of deodorant. If Apple could match a purchase’s level of hassle to its price, then it could do something much more impressive in payments than merely making them contactless.

PayPal acquires Paydiant, puts NFC into its Here readers

PayPal is buying Paydiant, a startup that provides the mobile payments and loyalty technology used by many big-name retailers use in their apps, for an undisclosed amount. PayPal also announced on Monday that it plans to start selling a near-field communications (NFC)-enabled version of its Here credit card reader, which will allow its merchants to start processing Apple Pay, Google Wallet and contactless card transactions.

Paydiant is the behind-the-scenes technology used by companies like Subway and Capital One to put payment options, loyalty programs and digital coupons into their apps. But its biggest customer is MCX, a consortium of big retailers including [company]Walmart[/company], [company]Target[/company], [company]Sear[/company]s, [company]Wendy’s[/company], [company]Exxon[/company] and [company]CVS[/company] that is launching its own digital wallet called CurrenC. You’ve probably MCX’s name pop up in the news lately as its members have butted heads with Apple for turning off NFC at their registers, effectively blocking Apple Pay for some of the biggest retail stores in the country.

At Mobile World Congress in Barcelona, I spoke briefly with PayPal’s senior director of global initiatives Anuj Nayar, who said Paydiant gives the payments giant another set of commerce tools to offer its merchants customers. While Paydiant focused on larger retailers, PayPal will be able to scale its products down to its vast network of small retailers. “We can create a digital loyalty program for the corner coffee shop,” Nayar said.

PayPal’s new NFC reader will be similar to the stand-alone point-of-sale terminal it launched in the U.K. two years ago. It has a numeric keypad with a slot for Chip-and-PIN card transactions and a Bluetooth radio to connect to a smartphone or tablet where PayPal’s Here app processes the transaction. The addition of NFC means it will accept contactless transactions from mobile wallets like [company]Apple[/company] Pay, [company]Google[/company] Wallet and eventually Samsung Pay (PayPal’s own mobile wallet doesn’t use NFC). It will also take payments from contactless credit cards popular in many countries outside the U.S., which is why PayPal first will roll out the terminal in the U.K. and Australia this summer and then launch in the U.S. later this year, Nayar said.

When it does come to the U.S., the reader will pull double duty as PayPal’s next-generation credit card reader. This year, retailers are beginning the transition to EMV cards, which use smart chips instead of magnetic stripes to transmit encrypted data at payment terminals. The familiar triangular PayPal Here reader in the U.S. accepts magnetic stripe transactions only, and I assume it will be gradually be phased out as more merchants move over to EMV payments.

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Samsung Pay has all the tools it needs to surpass Apple Pay

A lot of the features in the new Galaxy S6 and S6 Edge, like curved edges and glass-and-metal design, are examples of Samsung playing catch-up on the latest smartphone trends, but Samsung’s new mobile payments app stands apart. Apple and Google may have brought their contactless payment technologies to the market first, but Samsung Pay fills in sizable gaps that Apple Pay and Google Wallet have in their services.

Samsung Pay uses both near-field communications (NFC) and magnetic secure transmission (MST) technology from LoopPay. That means that it can not only make the same secure contactless transactions that [company]Apple[/company] Pay can, but it can also make “swipe” purchases on the vast majority of older payments terminals that haven’t upgraded to NFC. Samsung has also retooled the new smartphones’ fingerprint sensors so they work with a press rather than a swipe, making it easier to initiate a purchase with a thumb tap.

Just as significant as the technology is Samsung’s broader financial ecosystem. It’s brought [company]MasterCard[/company] and [company]Visa[/company] to the table as partners along with four of the largest card-issuing banks: [company]JP Morgan Chase[/company], [company]Bank of America[/company], [company]Citi[/company] and [company]US Bank[/company]. (At the launch event, Samsung CEO JK Shin said these were just a few of the financial deals Samsung had signed.) Banking deals were one of the key reasons Apple Pay was a big initial hit, as consumers could load almost any of their existing debit and credit cards into the iPhone’s contactless wallet.

The new Galaxy S6

The new Galaxy S6

For Samsung, those bank deals are particularly important because the biggest selling point for its mobile wallet is that it will work on a far larger variety of terminals in the U.S. than Apple Pay or any other NFC-only payment app. If the banks hadn’t gotten on board Samsung wouldn’t have been able to make that argument come this fall.

The U.S. is finally making the leap to EMV credit cards, which use a smart chip to send encrypted data to a payments terminal. It’s a much more secure technology, and Samsung’s MST technology can’t emulate it the way it can the numbers stored on the mag stripe of credit. But with the banks apparently lining up to work with Samsung Pay, that’s not a problem Samsung has to worry about anymore. The banks can simply pass that encrypted card data from the cloud to a secure element in the Galaxy S6 or S6 Edge, which the phone then passes either through its NFC radio or magnetically, depending on which technology is available at the terminal.

Samsung Pay will not only make both “smart” and “dumb” transactions, so to speak, but it has the potential to turn what would normally be insecure static payments into more secure, dynamic As LoopPay co-founder and now Samsung employee Will Graylin recently explained to me, MST can send dynamic data through a magnetic read head designed only to take static data. The terminal thinks it’s just getting a regular credit card number, but Samsung Pay could send out a prefix code that alerts the payment processor that the numbers it’s about to receive are EMV cryptograms. Samsung Pay can use the same method to send tokens — one-time-use numbers supported in the newest payment technologies — through even the oldest, junkiest card readers.

An earlier version of LoopPay's MST technology. Instead of living in a phone sleeve, LoopPay will be embedded directly into new Galaxy S-series phones.

An earlier version of LoopPay’s MST technology. Instead of living in a phone sleeve, LoopPay will be embedded directly into new Galaxy S-series phones.

MasterCard chief emerging payments officer Ed McLaughlin explained to me that the potential implications for the payments industry could be big indeed because the banks and consumers will no longer be tied to a particular type of transaction based on a merchant’s hardware.

“The type of payment you make is a business decision, not a technology one,” McLaughlin said. “This is a clear way to work with older [payment terminal] stock out there.”

While Samsung seems to have minded all of the technical and financial details, we’re going to have to see Samsung Pay in action before we can levy a final judgment. I was at the Galaxy S6es’ big launch at Samsung’s Unpacked event at Mobile World Congress on Sunday, and while Samsung executives showed a video of Samsung Pay in action onscreen, there didn’t appear to be a live demo at the event. None of the new Galaxy S6 and S6 Edge phones I played with at Unpacked even have the app installed.

If Samsung Pay launches with a bang this summer, Samsung will have a compelling mobile wallet that can rival Apple Pay in many ways, but it will only have that advantage for so long, especially in the U.S. As merchants upgrade their payment terminals for EMV, they’re also upgrading them to support NFC. Within a year or two, NFC transactions could become the norm rather than the exception.

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Google buys Softcard, teams up with carriers on mobile payments

Google and the mobile carriers have long been at odds over mobile payments, but faced with the runaway success of Apple Pay, the two rivals have become friends. AT&T, Verizon and T-Mobile are selling their mobile wallet joint venture Softcard to Google for an undisclosed amount, Google and Softcard revealed on Monday in separate blog posts, and they have agreed to pre-install Google Wallet on their Android smartphones starting this fall.

That’s quite a full circle to arrive at, considering that for the last three years the three operators actively blocked Wallet from their devices in blatant protectionism for their own mobile payments service Isis. The problem was that Isis, which changed its name to Softcard last year, was slow to arrive to market, meaning few Android phones had access to any kind of near-field-communications (NFC)–based wallet.

That left the nascent smartphone contactless payment market stillborn in the U.S. until [company]Apple[/company] stepped in with Apple Pay. Apple Pay is not only available on every iPhone 6 and iPhone 6 Plus (as well as the forthcoming Apple Watch), but it also built in a much bigger ecosystem for its service, bringing card-issuing bands and online merchants to the table that neither [company]Google[/company] nor Softcard managed to attract.

Those two also-ran wallets are obviously feeling Apple’s heat, so instead of battling it out in the Android space, they’re teaming up, which should make banks, merchants and especially Android-owning consumers happy. It probably would have made more sense to sign this deal a year earlier, though, as other companies are trying to fill the vacuum the Isis-Google war created with their own Android wallets.

Samsung last week bought universal digital credit card startup LoopPay, which uses an alternate technology to NFC that gives it access to most point-of-sale terminals in the market. As I wrote last week, Samsung still has to add a few missing pieces to its payments puzzle – most notably direct partnership with the banks – but there’s a good chance we might see the first Samsung contactless payments app debut in the Samsung Galaxy S6 when it is unveiled at Mobile World Congress next week.

Will Samsung’s mobile wallet plans work? We’ll know in 7 months

Samsung has entered the mobile payments fray with its acquisition of LoopPay, giving it the technology to turn its smartphones into wireless credit cards that can purchase goods and service with a wave of the wrist. LoopPay is clearly Samsung’s answer to Apple Pay, but there’s still one missing piece from its payments puzzle.

With LoopPay’s technology the consumer electronics giant now has all of the technical tools to take on Apple Pay, but Samsung still needs to form direct partnerships with the card-issuing banks. If it doesn’t, then the upcoming transition to new chipped smart cards will be awfully rough on its contactless payments technology.

Today LoopPay’s technology relies on what is essentially a spoofing of the credit card. It records the credit card number off of your plastic’s magnetic stripe, and when its fob or smartphone sleeve is waved over a payment terminal, it transmits that number through a magnetic field, emulating the physical card swipe. The technology works at nearly all point-of-sale terminals today, and I can vouch for its effectiveness. I’ve used a Loop fob to buy coffee at Starbucks and tools at my local hardware store with no difficulty. As Samsung incorporates this technology into its phones, it will work the same way.

The problem is that this kind of static magnetic transaction is going to be phased out of the U.S. retail industry starting in October (it already has been in many other regions of the world). The U.S. is adopting EMV (the name comes from the initials of backers Europay, MasterCard and Visa), which will replace magnetic cards with smart chip cards that store encrypted data that LoopPay won’t be able to emulate — at least not without the cooperation of the banks.

LoopPay's most recent iPhone 6 sleeve with detachable "card" module

LoopPay’s most recent iPhone 6 sleeve with detachable “card” module

LoopPay founder Will Graylin and Samsung’s head of mobile payments Injong Rhee assured me in an interview on Thursday that both LoopPay and Samsung have been in discussions with multiple banks and those partnerships are forthcoming. They also said that LoopPay’s technology is already optimized to handle EMV payments as soon as those first bank deals are signed.

I have no reason to doubt Graylin and Rhee, since even before the acquisition LoopPay already had the backing of at least one credit card powerhouse — Visa was an investor — and Samsung itself wields enormous clout. If it commits to making a Loop-powered wallet a key feature in its smartphones, then banks will want to come to the table, just as they came to the table with Apple Pay.

But Graylin and Rhee wouldn’t offer any details on the specific banks they’re talking to or any timeline for when those deals would be in place. That’s worrisome because the clock is ticking. If those deals don’t come down by October then Samsung may find itself with a mobile wallet that increasingly doesn’t work.

What happens in October

This year, banks will start replacing your plastic with chipped cards, and by the end year MasterCard expects that half of all U.S. credit cards will support chip-and-PIN transactions. Meanwhile, U.S. retailers are replacing their point-of-sale terminals with new card readers that accept EMV transactions.

The transition to EMV in the U.S. was originally expected to be slow – and it will take years before that last small merchant upgrades its hardware – but recent big security breaches like the one affecting Target have lit a fire under the major retailers, explained Osama Bedier, a long-time veteran of the mobile payments space. Bedier founded and is now CEO of payments terminal maker Poynt. Previously, he ran [company]Google[/company] Wallet from its launch until 2013, did product development at PayPal and is an advisor to and investor in LoopPay competitor Coin.

By the October deadline, the top 100 biggest retailers in the U.S. will accept EMV payment, accounting for 40 percent of all in-store retail transactions, Bedier said. Why the hurry? If they don’t, they’ll be liable for any fraudulent transactions made on chipped card at their stores.

Every point-of-sale terminal maker is developing an EMV reader, including Square

Every point-of-sale terminal maker is developing an EMV reader, including Square

That’s a huge shift in the U.S. retail landscape, but LoopPay and other digital credit card makers like Coin, Plastc and Swyp like to point out that even new chipped cards will continue to sport magnetic stripes so they will be able to load them into their universal cards. Conversely, even new payments terminals will still have magnetic stripe readers, so every merchant will technically be able to accept a transaction with their devices.

The infrastructure will remain in place for retailers to continue accepting their digital cards, so everything is hunky-dory, right? Here’s the problem: just because a merchant can technically accept a mag stripe transaction doesn’t mean they will.

EMV transactions are more secure because they use cryptograms instead of the numbers printed on your card face. When digital card holders start sending that insecure static data over payment networks instead of using the encrypted chip on their physical cards, the banks will notice, and a certain point they’re going to start rejecting purchases.

“It all depends on how long the grace period is,” Bedier said. “It could be three months. It could be six months. But the card issuers will start declining transactions.”

Samsung’s opportunity

The key for any of these universal card makers is to demonstrate there’s enough utility and demand for their technology that the banks will gladly climb on board, Bedier pointed out. And here’s where Samsung has a big advantage.

On its own, LoopPay was a small company selling a niche product. But with the might of Samsung behind it, it has enormous advantages over its digital wallet competitors, who are mainly startups trying to crowdfund their products. If Samsung were to make a big commitment to embedding LoopPay’s tech in all of its forthcoming Galaxy smartphones and its wearables, or if Samsung created a detachable phone module that you could hand to a waiter or sales clerk, then the banks would likely eat it up. The banks want to offer their millions of Android customers an alternative to [company]Apple[/company] Pay.

Could LoopPay's technology make it into the Galaxy Gear?

Could LoopPay’s technology make it into the Galaxy Gear?

Furthermore, Samsung would have much larger potential retail appeal than Apple could ever hope to achieve any time in the near future. Graylin explained that LoopPay can route secure EMV data through the mag stripe reader, effectively turning a static transaction into a dynamic one. That means LoopPay could process EMV transactions at any terminal, as it wouldn’t be restricted to working with chip-and-PIN readers or systems with near-field communications (NFC) radios, which is the big limitation of Apple Pay.

With the banks’ cooperation, Samsung could also go beyond the EMV standard to offer tokens – temporary credentials good for only one or a limited number of payments – just the way Apple Pay does. Since LoopPay would be connected to the cloud through the Samsung mothership, it could constantly update its encrypted credit card data from the banks.

“I think we’re going to offer a very unique experience,” Graylin said. “I think people will soon see that.”

So over the next seven months we shouldn’t just be looking out for announcements on how Samsung will incorporate LoopPay’s technology into its products. We should also be watching for the specific banking deals Samsung signs. If it gets enough of them quickly, Samsung could find itself with a mobile wallet that could rival Apple Pay. If it doesn’t, Samsung’s fledgling mobile payments plans could wind up buried in the same heap as Google Wallet and Softcard.

Wirecard targets summer launch for its wrist-worn digital wallet

Last month, Wirecard unveiled a wristband device that functioned like a digital wallet, storing credit cards, ID cards and even tickets on the end of your arm. The Smart Band was only a prototype, but if all goes as planned, the German payments company will start selling a commercial version of the device this summer in Europe, Wirecard told me in a recent interview.

Given that the Apple Watch will go on sale in April, Wirecard shortly afterwards could have an alternate wearable on the market that works with a digital wallet technology other than [company]Apple[/company] Pay. And given Apple Pay won’t be available in Europe until sometime later year, a wrist-worn contactless payments technology might actually be available to Android devices before they’re available to iOS users.

Wirecard Smart Band

Wirecard’s Smart Band uses a Google-backed technology called Host Card Emulation (HCE) to securely store and transfer credit card credentials to and from a smartphone. A near field communications chip in the band then communicates with a point-of-sale terminal, working at the same places that accept Apple Pay and [company]Google[/company] Wallet.

While Smart Band technically could be a way of putting Google Wallet in a wristband, Wirecard EVP of Mobile Services Joern Leogrand said that the company isn’t in any talks with Google and doesn’t have plans to do so. Rather it wants to use Smart Band to fuel transactions on its own digital billfold, he said, as well as the mobile wallets of its partners.

Wirecard dons many hats when it comes it finance. It builds white-label technology for other companies — for instance, it’s the brains behind the mobile payments services for [company]Telefónica[/company], [company]Vodafone[/company] and [company]Deutsche Telekom[/company] — while it also runs a consumer-facing bank that issues its own prepaid cards and a peer-to-peer payments network similar to PayPal’s.

Wirecard plans to make the make Smart Band available to its own customers and partners first. The first commercial Smart Band is under development and could be available to its own cardholders in Europe by this summer, Leogrand said. Wirecard will next offering it to its white label partners, Leogrand said. Carriers like Telefónica could use the wearable breathe life into their suffering mobile payment services.

But because of HCE, which virtualizes the secure smart card used in any mobile payments service, the gadget wouldn’t necessarily be tied to a specific carrier or device. Anyone who works with Wirecard for payment processing could use the band as an extension of their mobile apps.

“It’s not set in stone how we launch the Smart Band,” Leogrand said. “We’re in the very early stages of this, and we’re open to ideas.”

The end goal is to license its technology and sell its payments processing services to other hardware makers, Leogrand said. While the Smart Band prototype included some basic fitness tracking features, that kind of technology is well outside of Wirecard’s core area of expertise. Smart Band’s payments tech would be most useful if it were integrated into other multi-purpose wearables. That could mean high-end smart watches, but also cheaper sub-$100 fitness bands, Leogrand said.

[youtube https://www.youtube.com/watch?v=EydIoYdbS4A]

If you were hoping to test out the Smart Band in the U.S., then you’ll likely be disappointed. Until Wirecard signs some big hardware deal, the device will only be available in Europe (though European cardholders should be able to make payments on U.S. NFC terminals). Wirecard doesn’t have a banking license in the U.S.

Amazon closes out its mobile wallet trial after 6 months

It looks like Amazon’s diapers weren’t the only product the e-commerce giant retired Wednesday. The company has shut down its mobile wallet beta, which allowed Android and Fire phone users to store loyalty and gift cards in a digital billfold.

In a statement given to CNET, [company]Amazon[/company] spokesman Tom Cook said the e-commerce giant learned plenty from the six-month trial, and that it would apply those lessons to future Amazon products. But he didn’t say if Amazon had plans to bring its wallet back as a commercial product or if it would revisit the concept of smartphone payments in the future.

[company]Apple[/company] Pay has simultaneously reinvigorated the market for contactless and mobile payments while putting a lot of pressure on competing technologies. [company]Google[/company] Wallet has seen a big uptick in near-field communications (NFC) transactions, but it’s also been scaling back Google Wallet’s other features such as Digital Goods, which let you use its app to buy stuff outside of the Google Play store.

[company]Softcard[/company] — the carrier NFC payments system formerly know as Isis — just laid off 60 employees, and the latest rumors have it that Google and Softcard want to merge their wallet efforts. Meanwhile MCX, a smartphone billfold effort backed by the country’s biggest retailers, is fighting (and losing) a public relations war with Apple over its merchants’ resistance on accepting Apple Pay.

It might be tempting to view the closure of Amazon Wallet as the company conceding victory to competing smartphone payment technologies, but I think we would be reading too much into its actions. Amazon Wallet was never really an aggressive move into retail commerce like Apple Pay or Google Wallet. It never let you store credit cards or make a secure payment at the register. Instead, it was basically a way to store a bunch of loyalty and gift cards in a digital format, so merchants can scan in a bar code from your phone rather than a piece of plastic.

If Amazon is really going to go after the smartphone payments space, I imagine it would launch a much more fully featured wallet in the future. And if it doesn’t, Amazon got a lot of good data from beta that it could apply to its other mobile payments efforts, particularly the mobile point-of-sale credit card reader it just launched to compete with Square.

Wirecard’s Smart Band: A mobile wallet you wear around your wrist

When the Apple Watch comes out this year, it will have a pretty unique feature among wearables in the market: you’ll be able to buy stuff by waving the wearable at the register thanks to near field communications (NFC) chip and support for Apple Pay. But what if you don’t want to buy an Apple Watch and the necessary iPhone to connect it or you just don’t want to mess with Apple Pay? Well, a German payments company named Wirecard may just have an alternative.

Wirecard has created a wristband with an embedded NFC chip and a Bluetooth radio that connects to your smartphone. As with other the universal credit card concepts like LoopPay, Coin and Plastc; Wirecard lets you load a credit or debit card’s credentials into its device and use it to pay for goods in place of a plastic card. But instead of just emulating the digits on your card for a magnetic stripe reader, the Smart Band uses a new secure payments technology backed by Google, MasterCard and Visa called Host Card Emulation (HCE).

HCE basically creates a smart card in software, allowing it take advantage of new secure transaction technologies like tokenization. Instead of a static credit card number that any old magnetic stripe terminal can read, your credit card generates a unique number, called a token, for every transaction so merchants never see your actual card credentials. It’s the same security technology used in Apple Pay, the mobile carriers’ Softcard smartphone payments system and even some versions of the EMV chipped credit cards that are making their way into the U.S. market this year.

Wirecard Smart Band detailIn its announcement, Wirecard didn’t go into details about the bands other features, but the photo it released seems to indicate it has message notification and a weather widget (hopefully it will tell time as well). Wirecard plans to show off its financial wearable at the Digital-Life-Design conference in Munich next week, but there’s still no word yet on when the band will be available commercially or even if it would be sold outside of Europe, so I wouldn’t count on wearing your credit card on your wrist anytime soon (unless, of course, you buy an Apple Watch, expected to launch early this year).

As for the types of payment services [company]Wirecard[/company] will support, I suspect it will start with its own. The company wears many finance hats, but primarily it’s a competitor of PayPal in many overseas markets. It also issues its own [company]Visa[/company] and [company]MasterCard[/company] prepaid cards, which I imagine would be the first cards that would get digitized into Wirecard’s Smart Band.

But since the Smart Band used HCE it could feasibly work with other payment services, for instance Google Wallet. As you switched between mobile wallets, the device could reprogram itself as the smart card for each service. The NFC chip could also be used apps beyond payments. Wirecard said you could load loyalty card credentials into the band, and it could be used as a form of wireless ID. It could serve as your badge at conference, as guest pass at a resort, your ticket on a subway or key to your hotel room door.

Of course this all assumes that multiple industries adopt NFC as a contactless transaction technology – something NFC boosters have long predicted but has yet to happen. The retail industry now seems to be on board with NFC thanks to Apple Pay. But maybe putting NFC in more wearable devices could be the key to making its other applications more mainstream.

SmartWatch3_Stainless_Steel_Side_hi res

Sony SmartWatch 3

 

The [company]Apple[/company] Watch is good start, but so far NFC hasn’t made it into any Android Wear devices except Sony’s Smart Watch 3, and even that doesn’t appear to have any contactless applications just yet. Another device to look out for is Plastc’s digital card due out this summer. Though it has the standard credit card form factor, it also sports an NFC radio, meaning it could be used much the same way as Wirecard’s Smart Band for both contactless payments and as a digital ID.

Juniper: 1.6B people will make a mobile transaction in 2014

The smartphone may still be a long way from replacing the back-pocket or purse wallet, but people around the world are increasingly turning to their mobile devices to buy goods, transfer money and manage their bank accounts.