After much fanfare, the Apple Watch, Apple's first attempt at a smartwatch, was officially released last week.
Since then, various industry experts have offered their thoughts on the release and its integration with another Cupertino money-spinner, Apple Pay.
Ralf Gladis, CEO and co-founder of Payment Services Provider (PSP) Computop:
The Apple Watch might seem to some like something that’s an overpriced gadget, but I believe that whether you personally want one or not, it is just about to transform the way we pay for goods forever.
I’m not saying that Apple has the best mobile wallet technology available (although it probably has), however, what I am saying is that no matter how basic the technology in this first version is, or how expensive it is, the launch of the Apple Watch will be the tipping point for mobile payments. From this point forward mobile payments will change the world forever.
The real difference is speed. Paying with the Watch will be far faster than with a credit card or cash. It eliminates the need for a PIN, signature or printed receipt. The wearer will simply tap his Apple Watch on the merchant’s POS terminal. It saves time for both consumers and merchants alike and cuts queuing time drastically.
Those are two distinct advantages that will not only lead to Apple Pay’s success but also help Visa, MasterCard and American Express with the deployment of EMV and Near Field Communication (NFC) enabled POS terminals.
In my view, Apple Watch will now become an accelerator for NFC and a door opener for Visa, MasterCard and American Express which have been challenged in the area of mobile payments so far by small but innovative competitors.
Although Apple Pay is initially only available in the US, I’ll be closely watching speed of adoption given there’s a distinct lack of EMV/NFC infrastructure on that side of the pond. Europe is better equipped, however, recently there have been rumours of a delayed European roll-out despite Apple having set up a dedicated Apple Pay team in the UK.
Oliver Eckel, Cognosec CEO:
“Hackers will be as desperate as anyone to get their hands on the Apple Watch, because everything is breakable. No doubt the watch will prove immediately popular, so there’s no grace period for Apple to get things right from a security perspective either.
“Apple usually has extremely high security standards but hackers will be trying their hardest to break the connection between watch and phone, trying to find a way to reverse engineer the encrypted Bluetooth connection. Likewise, there’s a good reason Near Field Communications payment systems, which the Apple Watch uses for Apple Pay, usually have low limits.
"Despite the company’s best efforts to implement security measures such as fingerprint recognition via the iPhone, hackers will still try to interrupt the signal. This kind of exploit requires close proximity but hackers are nothing if not resourceful. In the past they have rigged regular looking briefcases to target NFC cards and could try the same thing for Apple Watch owners.
“These issues may be compounded by the volume of data stored on the watch – which is a bit of an unknown quantity at this stage. In theory it might be possible to access an iPhone and its data via the watch too, which opens a whole new can of worms.”
Jens Bader, Secure Trading Chief Commercial Officer:
“I don’t see the Apple Watch having any impact on payments or retail, despite Apple Pay playing a big part in the original marketing push and where Apple has clearly focused much attention. There’s simply no public demand to pay for things with your watch. No one seriously resents having to pull out their phone, wallet or card when making a purchase. That’s just for physical payments too, the Apple Watch will have even less impact online.
“Anyone in the UK that’s looking to buy the watch and use it for payments is in for a nasty surprise when they try it out in their local supermarket too. Users are wholly dependent on retail infrastructure and for the stores they visit to accept Apple Pay – which they simply don’t do here.
"In the UK, for the next few years at least, people will have more luck dusting off their old chequebooks, they’re likely to be accepted in more places.
“From a security perspective, we’ve already seen instances where Apple Pay has been broken by social engineering. A new device will simply increase the number of options available to hackers, who will be keen to find ways of exploiting the master-slave relationship of the phone and watch.”