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How Mobile Payments Might Work on the Apple Watch

The company didn't reveal how your bank or the store will trust that you are you without the fingerprint sensor included on new iPhones.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Apple said on Tuesday shoppers will be able to make purchases in stores using their Apple Watch instead of a plastic card or cash. But the company didn’t explain how it will keep your purchases secure. The watch doesn’t have a fingerprint sensor to authenticate purchases like the iPhone.

What we do know is the Apple Watch will use the same NFC technology as the iPhone 6 and will require users to place the face of the watch near the store’s checkout equipment, according to Apple’s website. As for payment security, it’s one of the many unanswered questions about Apple’s new products and services. And it’s a big one since Apple touted the security benefits of the phone’s fingerprint identification when it introduced its new Apple Pay system.

Apple didn’t respond to a request for comment on the topic, but MasterCard mobile payments exec Ed McLaughlin suggested that the watch may pull other biometric information from your body to uniquely identify you. The Apple Watch has four sensors on the back to monitor the wearer’s heart rate.

“It will able to know you are you,” he said in an interview. “The watch is a very, very sophisticated monitor.”

“There are more ways to fingerprint you without a fingerprint,” he added without elaborating.

Visa CEO Charlie Scharf also said the watch will have proper security. “There will be real authentication on the watch,” he said. “In our discussions, they understand the risks and have a solution for that.”

It’s possible people will have to punch in a PIN code on the watch to complete a purchase, but that will add another step to what is being billed as a dead-simple way to pay.

The watch won’t be available until 2015, but it’s a curious omission in light of the celebrity iCloud hack and the rash of security breaches at big box chains such as Target and Home Depot.

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