Here's my ideal mobile payments scenario: I go up to the counter with an NFC smartwatch or an NFC Ring, wave my hand or wrist Jedi-style over the contactless card reader, and the payment goes through. Maybe a digital receipt will show up on my phone's screen, but I'd never have to take the phone out of my pocket.
Sadly, this process is looking more like science fiction than science fact, now that the specs for Google's inaugural line of Android Wear smartwatches are out and Near Field Communication is conspicuously absent from the features of the LG G watch and the Samsung Gear Live watch.
The devices rely on Bluetooth, which can certainly be used for mobile payments, but the absence of NFC is surprising. Other smartwatches, including Samsung's earlier Galaxy Gear watch, used NFC to pair the device to a user's phone. If these devices have NFC, neither manufacturer considered it important enough to merit a mention.
Android Wear can still develop into a robust payment platform with its current technology. Even on phones, NFC is not considered essential; Starbucks accepts 14% of its U.S. payments through a mobile app that displays bar codes that get scanned at the point of sale, and Google briefly displayed a QR-based boarding pass in its Android Wear product demonstration during the June 25 keynote for Google I/O.
QR codes work fine for this purpose, but they have some issues that NFC does not. A QR code scanner must have an unobstructed view of the device's screen, meaning a user's sleeve or glove cannot get in the way. QR codes must be on the screen at all times, while NFC-based apps like Google Wallet can initiate payments even when the wallet app is running in the background.
But the QR code's few shortcomings may not be enough to have consumers and developers clamoring for NFC. SCVNGR's LevelUp, which typically relies on a QR code-based smartphone app, already has a wearable version for the Pebble smartwatch. This app was built by a third-party developer using the LevelUp API.
And many other technologies can enable smartwatch-based payments without requiring the user to lift a finger or a wrist.
Eat24 and PayPal have apps that enable mobile payments from Android Wear devices in different ways. With Eat24, users can order food from a favorite restaurant using a payment account linked to the app. The PayPal smartwatch app will let users check in and make payments in stores. PayPal did not explain how this would work, but the company already has a Bluetooth-based payment system called Beacon, which could communicate with either the user's smartwatch or the phone that the watch is paired with.
Below: Google demonstrates how to purchase a pizza in 20 seconds with the Eat24 app.
It's certainly possible that future generations of Android smartwatches will have NFC technology; Google indicated that many more smartwatches are already being developed on the Android Wear platform. Motorola's Moto 360 watch was shown at Google's event but does not yet have a product page because it is not yet available for preorder. Its specs may include NFC, but if not, there are certainly ways to add NFC to this ecosystem.
Just like the Isis mobile wallet uses a special NFC case to add payment capabilities to the non-NFC iPhone, companies could create NFC accessories such as stickers or wristbands to add the capability to non-NFC smartwatches.
But with the market for wearables still so new, perhaps it's best to just wait to see if consumers even want to buy and wear a smartwatch. Only time will tell.
Daniel Wolfe is Editor-in-Chief of PaymentsSource