A dozen Australian journalists attended an early morning briefing in a tiny meeting room at Mobile World Congress in Barcelona to hear Optus announce an expansion of its Cash by Optus mobile payments system to wearables – an Optus branded smartphone.

But at this stage it is a ‘proof of concept’ (POC) only. Optus has not said when it will available as a product, other than to say that it will happen towards the end of the year.

The system works only with a waterproof smart watch from Connected Devices, which Optus has commissioned to develop a wearable for use with Cash by Optus. The Connected Devices smart watch uses a proprietary real-time operating system, and has a battery that lasts up to nine months. It will enable a user to pay for purchases of no more than $100 with a wave of the wrist.

Cash by Optus is a contactless payment app introduced last year, powered by Visa payWave, which allows Optus customers to use a compatible Near Field Communication (NFC) smartphone to pay for goods and services instead of using cash or plastic debit and credit cards, through a prepaid debit card on the SIM.

“This next evolution of Cash by Optus enables contactless payments across multiple platform,” said Optus’s Ben White at the briefing. “It uses wearable technology – a connected watch or a wristband – linked to an Android or Apple handset.

“Payments can be made using only the wearable without the linked phone nearby. When in close range, the connected watch and linked smartphone sync up via Bluetooth to update the account balance on the connected watch and transaction details on the linked phone.”

White said Optus was the first Australian telco to launch a mobile payments app late last year. “It has received great feedback from our Android customers, but the biggest frustration came from our iPhone customers who wanted to try Cash by Optus, but didn’t have a compatible phone. That’s why we’re developing this wearable technology, which is designed to work on both Apple and Android smartphones.

“We see huge opportunities in the wearable market by bringing new experiences to our customers through products that combine trusted technology with lifestyle benefits. Our aim is to bring contactless payments to our entire customer base across lots of platforms.”

Launched in collaboration with Visa and Heritage Bank, Cash by Optus uses (NFC) and Visa payWave technology that can replace cash purchases below $100. Australia most advanced market in the world for contactless payments.

Cash by Optus works ike a Visa Prepaid debit card. Customers can load up to $500 at any one time and make contactless purchases under $100 at any of the hundreds of thousands of retailers that accept Visa payWave. To get access to Cash by Optus, customers need an Optus mobile service on a monthly plan, a compatible Android smartphone, a NFC enabled SIM and the Cash by Optus app. Cash by Optus is now available for over 110 compatible Android devices from ten different vendors.

The app uses Visa payWave technology, which features the international EMV chip standard, and provides some of the most widely adopted cryptographic security.

Cash by Optus speeds up the transaction process and makes payments even more convenient compared to fumbling with cash and heavy change. Australians are leading the world in their usage of contactless payments with over 75 million Visa payWave transactions in January 20153. In fact, more than half (60%) of face-to-face Visa transactions in Australia are made using Visa payWave.

“Optus is focused on bringing innovative products to market,” said White. “The fast adoption of contactless payments combined with the high penetration of smartphones in Australia provide the ideal environment to foster next generation services.