With a new approach, the IoT could revolutionise the payments sector
17 September 2018
IoT: Internet of Things, def: a network of physical objects or “things” embedded with electronics, software, sensors and network connectivity which enables these objects to collect and exchange data.
Meaning… anything you own, wear, touch, listen to or use to post on social media could be a marketplace for you to purchase something you’ve found or something that has been suggested to you.
The IoT forces financial services and manufacturers and retailers worldwide to dramatically change the way they do business.
Gartner currently lists IoT initiatives at the top of the “hype cycle”. There’s a huge amount of business buzz, and every event you go to has IoT on the topics list. However, when you really dig into it and talk to people about plans and initiatives already running and about results to date, you find that most companies haven’t got very far. The opportunity is there, but more people could be seizing it.
The opportunity to leverage IoT as a competitive advantage is here now. There are opportunities across all industries, but they require a new way of thinking – about how data is used, how much we can handle, how fast we can process and analyse it, and ultimately where and how decisions are made. It’s a step-change to tap untapped markets. As technology becomes less expensive and more reliable, it’s expected that IoT will really take off.
Consumers are found to be most willing to engage brands with new technology that gives them more control of their shopping experience. Imagine a shopping list pulled together for you, based on your previous purchases, that you simply approve or reject. Or better, that requires no interaction at all – when you use your last drop of milk, a new one is already on order and soon due for delivery.
The main pull of IoT is convenience. Consumers are becoming comfortable with the digital shopping experience – they are prepared to input their password into Amazon and make a purchase three clicks later. They are comfortable ordering Ubers via Alexa.
IoT takes advantage of advanced technologies from machine learning, AI, drones and blockchain, to name a few. Therefore, IoT cannot be fully realised without a modern payments infrastructure. Payment companies such as Stripe, Braintree, Judopay and Adyen are already working on offering more opportunities for embedded payments that do not sacrifice security standards.
Mobile commerce has long been at the forefront of merchant success and consumer experience. It’s no secret that streamlined mobile payments experiences are the foundation for increased merchant revenues. IoT takes this to the next level. Rather than navigating to a retailer’s mobile site, users can simply interact with brands of their favourite messaging apps (such as WhatsApp) and even make purchases.
As artificial intelligence (AI) becomes more pervasive in the payments space, retailers are investing in technology that pairs AI with traditional payment processing platforms to enable a seamless payments experience for consumers that goes beyond mobile, too. We have seen this in-car payments, for example. Where a consumer can drive into a petrol station, order a coffee and a muffin, fill up the tank and drive out without ever getting out of the car, and the payment is automatic.
Increasingly frictionless payments are alluring to both retailers and consumers alike. They make for quicker, easier purchases and a customer experience that is beyond expectation.