In my dreams, I can walk up to any cashier and make a payment by waving my hand over a terminal, much like Obi Wan Kenobi's "These aren't the droids you're looking for" trick in Star Wars. And that's all I would have to do.
But as close as we've come to this dream, with technologies like Apple Pay and Disney MagicBand hitting the market, we are still nowhere near this kind of Jedi-like smoothness.
At first, MagicBand seems like the closest thing to this vision of the future. It is a wristband that anyone visiting a Walt Disney World property can get, and it is integral to nearly every interaction a person has during a Disney vacation. It is used as a theme park ticket, a hotel key, a line-skipping pass and an identifier for picking up photos. It can also be used to make purchases at stores and restaurants on Disney property, and half of Disney World patrons have one strapped to their wrists.
But the actual process of making a payment is still clunky. Disney requires a PIN for purchases and a fingerprint for park access, both of which are holdovers from its Key to the World contactless cards. Its readers don't accept any other form of contactless payment, so a patron wishing to pay with a contactless card or even Apple Pay is out of luck. And the bands, despite being widely customizable, are still very toy-like and conspicuous in anything other than vacation attire (I was told to take mine off when posing for photos at my brother's Disney wedding).
Apple Pay has its own set of problems. Rather than give Near Field Communication payments a much-needed boost, the Apple wallet fragmented the market. Some of the merchants committed to the rival CurrentC wallet shut off all NFC payment capabilities in an effort to block Apple. This means Google Wallet, Softcard and even contactless plastic cards are now useless at these stores. And even though Apple has about 500 banks and credit unions signed up for Apple Pay, these companies are going live in phases, and their advertisements treat Apple Pay as a competitive differentiator rather than a new industry standard.
The Apple Watch may help bring about the Jedi-like process of waving a hand over a reader, but at $349, even the lowest-end Apple Watch will be $50 more than the most expensive Android Wear watch available today (and a full $150 more than the cheapest Android option). It's also more expensive than the on-contract cost of most iPhones.
But, to borrow more Star Wars terminology, the Apple Watch could still be contactless payments' New Hope. Apple devotees aren't typically deterred by cost, so the price tag may be less of a deterrent for consumers who are already in Apple's ecosystem. And Apple's watch will use sensors to lock the watch when it's removed, possibly eliminating the need for the PIN authentication Disney's MagicBand uses.
If Apple Watch succeeds in convincing consumers to make wrist-based payments, we may be in for a new wave of payment-capable watches and bands seeking to copy Apple's performance an Attack of the Clones, one might call it. Already, banks like RBC, Barclays and Caixabank are testing or issuing their own payment-capable wristbands. Even Starbucks is getting in on the action by bundling a payment app and a $5 gift card with the new Microsoft Band.
But for now, few consumers can commit to a mobile or wearable payment-only lifestyle (unless they are willing to do all of their shopping inside a Disney theme park). And even if Apple can make wearable payments easier through its smartwatch, it must still convince more merchants and banks to join its cause.
Daniel Wolfe is Editor-In-Chief of PaymentsSource.