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Evolving Payments in the Era of IoT

The Internet of Things (IoT) – once a buzzword – is now becoming a reality. As we approach a staggering 31 billion connected devices worldwide within the next two years, retailers are wondering how to edge in on this new technology to increase revenues. 

Retailers that have already bought into this technology as a way to sell are enjoying a myriad of benefits, including product performance and quick product replenishment. Retail behemoths aside, many retailers are still not entrenched in how IoT is impacting payments.

Conversational Commerce Becomes Mainstream

While it seems there are more connected devices than ever (watches, wearables, thermostats, cars, the list goes on), the smartphone continues to take the cake when it comes to consumer favorites for shopping.

Mobile commerce has long been on an upward trajectory as more shoppers engage in webrooming and showrooming. Smart retailers have picked up on this trend and invested in technology that streamlines omnichannel commerce. It’s no secret that streamlined mobile payments experiences are the foundation for increased revenues.

That said, the types of mobile payments continue to evolve. We are well past simple transactions on a responsive mobile website. Today’s consumers are looking for retailers to bring the business to them – on their preferred channels.

Enter conversational commerce, where consumers can pay through chat and voice bots. Rather than navigating to a retailer’s mobile site, users can simply interact with brands on their favorite messaging apps (think: iMessage and Facebook Messenger) 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 roll out to voice-controlled assistants like Google Home and Amazon’s Alexa. Users can make a voice purchase request, using their payment card and shipping information on file, and place an order. 

Increasingly frictionless payments are alluring to both retailers and consumers alike. It makes for a quicker, easier purchase that all but eliminates the “payments experience” altogether.

Security Must Remain Paramount

While frictionless payments are becoming the norm, fraudsters are constantly looking for vulnerabilities to exploit.  The thing about frictionless payments is that they must be easy for the authorized cardholder, not for nefarious characters looking to make a score.

Balancing user experience and security has long been a tall order for merchants. The card brands have launched programs to aid in this effort, especially as the IoT becomes more pervasive.

One example is the Visa Ready program, which was launched to certify and secure payment experiences created by technology companies and device manufacturers. It enables manufacturers to embed secure payments into the connected devices they are creating, facilitating frictionless payments that don’t put consumers at risk.

Visa has partnered with various strategic partners to provide these manufacturers with guidance on EMVCo payment tokenization implementation via a Visa-approved payment reference design. Since any payment solution implemented through the Visa Ready program must meet its functional and security standards, end-users can be sure that their sensitive data is protected at the highest level.


We’ve only scratched the surface as to what is possible as the IoT expands and as more devices become connected. Payments technologies are already in the works to offer more opportunities for embedded payments that do not sacrifice security standards. It’s a golden opportunity for forward-thinking merchants to invest in these technologies and get ahead of the consumer preferences curve.



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Jared Ronski

Jared Ronski



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11 May 2018



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This post is from a series of posts in the group:

Payments strategies 2015-2020-2030

Payments systems visions, strategies, trends, pilots, forecasting, and planning for the short-, medium-, and far-term.

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