(i)Watch Out for the Commerce Angle

There are a bunch of possibilities for why the iWatch should exist, but the one that intrigues me the most is the possibility of it being a physical commerce play.

A couple of pieces of information for background:

From the WSJ today:

"Apple Inc. is laying the groundwork for an expanded mobile-payments service, leveraging its growing base of iPhone and iPad users and the hundreds of millions of credit cards on file through its iTunes stores.”

From a recent TechCrunch post:

"Apple’s patent for heart rate monitoring sensors describes ways they might be used to identify a user according to their unique biometric information. The fingerprint sensor in the iPhone 5s serves a similar purpose, but paired with a heart rate sensor, it becomes less of a convenience factor and more about secure identification.”

What we have here is a situation where Apple has hundreds of millions of credit cards on file, the ability to securely identify users, and thoroughly tested products that can be used as a Point-of-Sale device (iPad and iPod Touch).

It’s not impossible to imagine a scenario wherein you go order a cup of coffee, you walk up to the register (an iPad), you ring it up with your iWatch (NFC? AirDrop?), the iWatch verifies your identity through your heartbeat, and then charges it to the default card you have on file with iTunes. To make doubly sure it’s you, your iPhone receives a push notification of the purchase and you have the option to tip.

The customer is happy because it’s incredibly easy (no signature, eventually no need for a specific currency/region). The store is happy because it adds an extra layer of fraud protection and a better experience for the customer. And Apple is happy because it takes a cut of the action.

This use is exciting as is. But as trust between all parties builds, it becomes even more interesting when it’s used for identification for things like unlocking your house, getting on an airplane, or picking up prescription drugs. It’s a near endless area for growth.