LAS VEGAS — The utility of smartwatches is still largely misunderstood by consumers, but the ability to do mobile payments from the wrist — without a phone — might be the first killer smartwatch app.
While the Apple Watch does contain the NXP (near field communications) chip needed for secure mobile payments, it will rely in its first iteration on an iPhone 6 or iPhone 5S to complete mobile payments.
Sources have told VentureBeat that the Watch will do phone-free mobile payments within a year, but it remains to be seen if that’s true.
And Apple wouldn’t be the first. Other smartwatch makers are getting their first. But you have to search them out.
One is LAKS, which we found in the NXP tent at CES this week. Its payment program is called Watch2Pay. (Catchy, huh?)
In a collaboration with Mastercard, LAKS owners can make payments from their watch at merchants with contactless sale terminals. Mastercard makes a small card that looks like a SIM card with an NXP secure element baked in, and issues it to the owner of the watch. When an NFC-enabled point of sale terminal recognizes the chip it deducts the purchase amount from the user’s Mastercard account.
Sure, it’s a little clunky, and the same secure element that’s baked onto the little card could just as easily be baked onto the watch’s circuit board. That’s probably how it will be done in the future, said NXP VP Sami Nassar.
For now, LAKS is only available in Poland, the Czech Republic, Serbia, and Austria. But Nassar says LAKS and its Watch2Pay technology is searching for a major credit card issuer partner in the United States.