IBM and Visa join forces to turn billions of connected devices into points of sale

IBM and Visa join forces to turn billions of connected devices into points of sale

IBM has struck a deal with Visa which will give all of Big Blue's Watson IoT platform customers access to the card giant's payment services, potentially turning billions of cars, fridges, sneakers and other connected devices into points of sale.

To push their shared "vision" of embedding payments into any device, the partners will offer IBM Watson IoT clients the chance to tap the Visa Token Service, which replaces sensitive payment account information found on cards with a unique digital identifier.

This could see payments and commerce supported on a huge chunk of the 20 billion connected devices estimated to be in the global economy by 2020.



One area of particular promise is connected cars. This week, Jaguar unveiled technology that means owners can use their car’s touchscreen to pay for fuel at Shell service stations in the UK using PayPal or Apple Pay.

IBM envisions many other potential benefits, such as the Watson IoT platform alerting a driver when their car's warranty or certification is about to expire or if specific car parts need replacing. With this information, the driver could order parts with the push of a button, or schedule a service appointment.

For its part, Visa gives the example of sneakers with a chip that proactively sends an alert to a runner's fitness tracker at the end of each run, letting them know how many miles have been logged in the current pair and then reminds them when its time to buy replacements before placing the order from a preferred retailer using a preferred Visa card.

Jim McCarthy, EVP, innovation and strategic partnerships, Visa, says: "The Internet of Things is not only driving a more connected world, it's changing the way we live, shop and pay, by moving data and the point-of-sale to wherever the consumer wants it to be.

"With the power of Watson's cognitive technologies and IBM's leadership in IoT and security, they are the ideal partner to help us deliver secure payments to 'virtually anywhere' and on the enormous scale of the IoT."

Comments: (11)

Melvin Haskins
Melvin Haskins - Haston International Limited - 16 February, 2017, 18:08Be the first to give this comment the thumbs up 0 likes

I had already reduced my use of VISA down minimal use, because of their inability to process on-line purchases (I have had several major purchases refused without explanation or intervention). Now I will drop VISA completely.

Richard Kalas
Richard Kalas - GFT Financial Ltd - London 17 February, 2017, 08:18Be the first to give this comment the thumbs up 0 likes This is an extremely interesting venture for IBM and VIsa, and yet another alert to financial services institutions to understand their digital readiness. The banks must understand that IoT should be considered as small interactions, often and at scale. It is more important they prepare their infrastructure for this. For example, we have seen that around 30-40% of consumption of their mainframe processing can be simple balance queries. Whilst a smart fridge or intelligent shoes won't disintermediate a bank from their customers, the increase in touchpoints with their systems will impact their costs significantly yet preventing a customer from connecting will encourage them elsewhere. The strategy of Open API and Mainframe Offloading is aligning to these. Enabling customers to connect anything with their finances yet allowing banks to efficiently manage the infrastructure and associated costs.
Bill Trueman
Bill Trueman - Riskskill.com - London 17 February, 2017, 09:171 like 1 like

@MelvinH - That shouldn't be anything to do with Visa, but entirely due to your bank (i.e. the bank that issues you with the card). Visa is simply the 'road' - whereas you seem to have a problem with the car'. Moreso, I struggle to relate your challenge to the Finextra article.

Tom Hay
Tom Hay - Icon Solutions Ltd - London 17 February, 2017, 09:483 likes 3 likes

The example of smart "sneakers" (or "running shoes" as they're known to anyone who actually runs) is yet another IoT payment solution looking for a problem. For one thing, depending on how much you run, shoes typically last several months or maybe a year or more. The effort of adding auto-ordering and payment capability to the shoes is simply not worth the saving of time. For another, choosing a new pair of running shoes is part of the fun of being a runner - why do you think manufacturers bring out new models so frequently? Having a chip simply re-order the same model of shoe would reduce the enjoyment of the sport. I suggest Visa spend more time considering the big picture of what consumers actually want and how they behave, rather than using gee-whiz technology for its own sake.

James Cranfield
James Cranfield - Insight Consultancy UK Ltd - Madrid 17 February, 2017, 09:58Be the first to give this comment the thumbs up 0 likes

Agree that the sneakers is an odd example to highlight.  I think most IOT players are desperate to get away from the connected fridge example but there are so many more interesting examples that could be highlighted.  The "running shoes" example raises so many objections in consumers' minds the moment it is mentioned.  Why?  What if I run on soft terrain, will it adapt?  I don't need to be told when to by new shoes, etc...but my gas boiler connected to the a dynamic price checker, maybe.  My lights choosing the most efficient day/night tariff for elecrticity...possibly.  The Jaguar/Shell example is better, although needs to be broader than petrol to make a case.

Still, I find this tie up very interesting.  I think it's a good move.  IBM and Visa could be aiming to be the ingredient element for all things IOT.  "Intel Inside approach". 

Bill Trueman
Bill Trueman - Riskskill.com - London 17 February, 2017, 10:13Be the first to give this comment the thumbs up 0 likes

Why on earth would we want the running shoes to be in control? The logic would be that the shoes would talk to the fitness APP. The fitness APP would then be the more appropriate 'controller' to start the thinking about the buying and to make it an 'experience' as shown above. The shoes would have only a 'single-mindedness' that very few people would welcome if they did have the time to programme them to do so. The APP however could also assess whether we need socks, find the nearest shop, drink, food, medical attention(!) etc. I can't see anyone putting the shoes in command. Agree with above writers (hello James), that the example borders on crass - and certainly does not sell the concept very well. In the usual example it always confuses me as to how fridges know what to buy?

J.Eric Bousser
J.Eric Bousser - INVESTNEWS - 17 February, 2017, 13:22Be the first to give this comment the thumbs up 0 likes

What will be offered to Kenyans who run bare feet ?

Tom Hay
Tom Hay - Icon Solutions Ltd - London 17 February, 2017, 13:482 likes 2 likes

Barefoot Kenyan runners use M-Pacer !

Bill Trueman
Bill Trueman - Riskskill.com - London 17 February, 2017, 13:53Be the first to give this comment the thumbs up 0 likes

Mmmm - we are rather digressing here! Entertaining though.

A Finextra member
A Finextra member 17 February, 2017, 14:16Be the first to give this comment the thumbs up 0 likes

Like some here already stated, this is not about Visa, not about your bank, not about your cards. It's about an "Internet for Value" and "Internet of Things" (IoT) opening a completely new market of services build on micropayments. Micro- and small cheap crossborders payments will also help many in poor countries in having access to financial services (what some even do not have now in their own country, needless to say they can't afford to send send or trade small values Xborder). Ever tried to send 100$ from US to let's say Australia? It's cheaper AND faster to put them in a letter... And than I even didn't talk about the trading to AUD or other foreign currencies ... We're still in the sate of making banks and thise like VISA, SWIFT, .... incredible profitable for a horrible service. Applaus fir Visa if they really want to do something about it!

Those wanting to understand and learn more ... this is a very interesting video on this topic

https://youtu.be/QlNGTEn0p6w

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 17 February, 2017, 18:31Be the first to give this comment the thumbs up 0 likes

As of now, my employer is not a Watson client. As a result, I'm forced to monitor the condition of my pair of sneakers myself once every few years and buy a new pair of sneakers whenever my existing pair shows visible signs of wear and tear. If only I worked for a Watson client, I'd be relieved from the mundane task of checking the physical condition of my sneakers once in a few years and spend my time on strategic activities like - um - dreaming up some inane use cases for partnership between my company's products and Watson.

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