the internet of payments

Turning Boring Buying Into a Quick and Easy Activity

In less than three years there will be 6.6 devices connected to internet per each person on the planet. Merchants and retailers see this as a big opportunity to shift payments to a whole new level.

You still cannot buy milk just by having drunk more than half a bottle – your fridge is not that smart yet. It doesn’t understand that you will need to refill it with more milk. Nor can you pay utilities directly from your home only by usage or even pay parking directly from cockpit of your car.

Yet, most of these buying experiences aren’t as much science fiction as one might think. They can all be done right now, just in a slightly different manner: by mobile phone or by using an online service. But, the future in which payments are truly ubiquitous is just around the corner: it will become the present via Internet of Payments, which is on the rise.

Smart Ordering and Even Smarter Paying

The world’s largest online retailer Amazon is selling branded ordering buttons, called "dash sticks", small switches connected to the internet with which you can order a refill of your favorite washing powder directly from your bathroom. Amazon has also introduced Alexa, a device which enables you to make a purchase from your home just by talking to it. In Europe, large consumer electronics manufacturers are developing smarter home appliances that are going to be payment-ready while car manufacturers in Germany are testing payments directly from a car.

Technology is transforming the payment ecosystem with the point of sale shifting from POS devices in stores and online ordering forms to the worlds of Internet of Things and Internet of Payments. According to Gartner, 20% of IoT devices are related to connected cars, 40% to IoT consumer electronic products and 40% to business specific IoT meters and similar devices. This ratio is going to be maintained in the next three years.

It is estimated that there will be 6.6 devices connected to internet per person on the planet in less than three years. The variety of the devices themselves, as well as the range of what they can do for their users and for the service providers will surely be quite diverse.

This will bring about big opportunities for retailers and manufacturers but also for the financial industry. According to Statista, in-car entertainment will become a big new point of sale by 2020, contributing $6.5 billion in turnover. In-home purchasesare already growing 29% year over year and are expected to hit $43 billion by 2020. But Statista is emphasizing that the rise of wearable tech that is based on IoT will only boost smartphone as a predominant point of sale at least by 2020.

The Last Chance

Digital transformation specialists agree that 2017 is the year when retailers should either jump on the IoT bandwagon or risk being left behind. In the near future, the leading multichannel retailers are very likely to begin exploring in-store version of IoT in order to better bridge the gaps between the online and physical offers.

This will also align them with the changing behaviors of growing number of consumers that are tech-savvy and enable them to compete in a world in which, according to major US technology players, by 2020, there will be more than 50 billion connected devices, up from just under 23 billion devices in 2016.

As security of IoT devices is becoming more and more important, Ovum expects that, by 2021, the overall market for IoT managed security services will surpass $11 billion.