iWatch’s Killer Feature Could Be Two-Factor Authentication For Payments

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How will Apple make us desperate to buy its smartwatch? By taking the risk and clumsiness out of mobile payments.

Imagine if your iWatch could recognize that your iPhone is within range as a pre-payment security check. The two could then connect to a retailer’s point of sale via Near Field Communication (NFC), and a “Pay $20 to Starbucks?” confirmation could pop up on your iWatch. With a simple tap or voice command, you could complete the payment without ever entering a password or even taking your phone out of your pocket. Simple, speedy, and safe, this could open mobile payments to the mainstream with Apple at the core.

You can practically see the slick Apple demo video showing a mom with babe-in-arms gracefully paying for groceries, even with her hands full.

While a slew of smartwatches have launched this year, most have been met with a resounding “meh” from the public because they don’t do much you can’t already do with a phone. Google Now activated by voice command has big potential to deliver utility through a watch without the need for a keyboard, but the average consumer might balk at shouting into their wrist on the street.

Apple’s answer to why we need the iWatch may not be what it can do that your iPhone can’t, but what they can do together.

Apple is already poised for this strategy because many people buy all their high-tech gadgets from the company. iPhones, iPads, iPods, MacBooks. There were some synergies between iPods and Macs, or using iPhoto or iCloud across devices. But the iWatch/iPhone two-factor authentication trick could let you replace your wallet if you join the cult of Apple.