Everyday devices like appliances, wearables and cars can connect to the Internet thanks to tiny sensors embedded inside. Some of these smart devices have cutting-edge digital payments capabilities that allow them to initiate payments on consumers’ behalf.
This is connected commerce. Not only is it very real, but it’s also poised to change the future of payments. Connected commerce offers new value to both consumers and payment providers. Consumers get automatic purchase convenience. Payment providers benefit from expanded commerce potential.
The Art of the Possible
Consider this exciting case in point. Working with Accenture, Visa built a connected car prototype to revolutionize payments on wheels. Employing liquid design and development concepts, the companies moved swiftly from a general idea to pre-concept, design, implementation and roll out of a proof-of-concept in just 12 weeks.
Based on the proof-of-concept, a single touch on the car dashboard lets drivers easily pay the bill on the road. Payment credentials are loaded into the car and are made available for secure, frictionless payments to other devices.
What Consumers Think
Connected commerce solutions like Visa’s epitomize the simple, personal, everyday payments experiences that respondents to our 2015 North America Consumer Digital Payments Survey crave. Highlights of the survey findings were recently presented at Money2020, listen to the presentation to learn more about customer expectations for payments today and in 2020.
Our survey tells us that consumer adoption of device-initiated payments is in its infancy. Two out of every ten survey respondents are interested in this form of payment today. This is a function of new and evolving technology that has yet to flood the market and a value proposition that has not fully crystallized for most consumers.
Preparing for the Inevitable
Over time, however, we expect consumer interest in device initiated payments and the impact of connected commerce to grow.
Given that, there are three areas that payments players should focus on to build capabilities to support seamless, secure and real-time digital payments processing through connected devices.
- Transferring money. Companies will need a strategy to address challenges of processing payments and moving money domestically and internationally. They will need to explore the role of cryptocurrencies, block chains and digital distributed ledgers to support smart device-initiated commerce.
- Securing funds. Take up of connected commerce options will depend on consumers’ trust of the security of these payment transactions. Digital credential management can be used to secure payment credentials and personally identifiable information within an organization or across connected devices.
- Delighting customers. Wherever connected commerce technologies lead us, payments players cannot sacrifice the customer experience. Any approach that introduces undue complexity or confusion will never succeed. The more relevant, personalized and efficient the experience is, the more accepted it will become.
The Evolution will Continue
More and more devices are getting smart. Cisco Systems, Inc. reports that there will be more than 50 billion connected devices in use around the world by 2020.
The possibilities for connected commerce are likely to grow alongside this proliferation of smart devices. While the evolution will continue, payments providers shouldn’t wait to act. To get started, I encourage you to read more about how to get ahead in connected commerce.