Cue talked in some detail about how Apple's payment service and wearable will work together, though most of this information was previously announced by Apple. The watch will need to be unlocked in order to use Apple Pay, which can be done either through Touch ID on your iPhone, or a passcode on the Apple Watch. Cue also said that you can choose if you'd like to enter your passcode every time you use Apple Pay on the watch, according to CNET:
"You can [type a password] if you want to, but you won't normally have to," Cue said. Right now the watch is unlocked, and I could do all of it without having to type any code. If I [took it off and] handed it to you, now you'd have to type in a security code or unlock it from your phone."
While currently limited to the iPhone 6 and iPhone 6 Plus, Apple Pay will expand to more devices with arrival of the Apple Watch. As Apple has previously announced, the iPhone 5, 5c, and 5s will all be able to use the payment service when connected to the Apple Watch.
We can probably expect Apple to highlight Apple Pay use with the Apple Watch during their "Spring Forward" special event, which will take place this coming Monday, March 9.