Eddie Cue explains how the Apple Watch handles Apple Pay
Dante D'Orazio at The Verge:
According to CNET, the Apple executive explained the feature thusly: “You don’t have to authenticate on the phone,” he said. “Your watch has to be unlocked, and your phone can unlock your watch.” He added, “If I took my watch off and gave it to you, it would know and no longer work. If I wanted to pay right now, I could pay with the watch and not have to take the phone out of my pocket.”
The Apple Watch’s health sensors know when the device is strapped to your wrist and when it’s off your person. According to Cue, Apple is taking advantage of that data to simplify the payment experience. You will, however, need to confirm a payment by tapping the button on the side of the Apple Watch.
It just works.
Also, it’s strange that Apple would have a high-level exec detailing how the service works outside of their own event, before the device launch.