How IoT is changing the payment industry
Every device connected to the internet will become a part of the Internet of Things (IoT) - from coffee machines to wearable payment devices. The IoT is one of the biggest trends of the fourth industrial revolution - here's how it's already changing the payment industry.
Every device connected to the internet will become a part of the Internet of Things (IoT) - from coffee machines to wearable payment devices. The IoT is one of the biggest trends of the fourth industrial revolution - multiple devices connected into networks allow the automation of routine tasks, facilitate monitoring processes, or help process payments based on real-time user data.
By 2027, the number of IoT-enabled devices used worldwide may hit 41 billion. The opportunity to collect and process information at a much greater speed than ever before and the simplicity at which modern devices interact with each other backs up this rapid expansion of this industry.
Many payment processing companies seek to enhance their products and services with the IoT, streamlining payment experiences for consumers. This article discusses how connected devices are changing consumer payment habits and provides tips for businesses wishing to keep up with the world that becomes more and more connected.
Understanding the Internet of Things
The IoT is at the very core of how the world is becoming smart. By definition, the internet of things encompasses everything with an internet connection, but the term usually describes devices connected to each other. Some common examples of such devices involve smartwatches, thermostats, smart speakers, and many other devices offered by the expanding market.
Everyday devices equipped with various IoT sensors can automate routine tasks: monitor health indicators, set reminders, manage assets, control climate changes, or make payments. These sensors are connected to a network, which allows devices to exchange data through a cloud and control the operations of other devices. So, IoT is an integration of sensors, computing devices, and storage systems.
Your company can significantly increase customer satisfaction, improve operational efficiency, reduce operation costs, and boost revenues by using IoT devices for service provision.
IoT-enabled payments are the future
To simplify the payment experience for consumers, merchants seek ways to promote seamless spendings. Today consumers don't need their credit or debit cards to pay; instead, they have the option of making payments with smart devices, even by using voice assistants like Google Assistant and Amazon Alexa.
Consumers are becoming more tech-savvy. This consumer trend boosts the demand for services and products that are not just convenient but provide consumers with a way to pay at their fingertips. In addition, the technology allows advanced automation options, which can facilitate payments. IoT-enabled devices can order products or services without human intervention: smart fridges make orders in super-markets, smart cars pay at gas or recharging stations, voice assistants find and buy tickets, and so on.
Many financial and banking companies adopt the IoT technologies and associated benefits, wishing to keep up-to-date with the growing demand for automated and convenient payments.
The following are examples of how this technology is revolutionizing the field of finance.
4 cases of IoT revamping payments
Providers of financial services invest in the IoT to deliver a client-centric experience, boost safety and security by allowing the usage of wearables, improve efficiency through process automation, facilitate interactions between financial devices, and monitor clients' payment habits. Let's look at how industry leaders use IoT capabilities to design new services and reinvent the customer experience.
The provider of online payment processing solutions focuses on employing the IoT to customize software, facilitates payments, and provides businesses of different sizes with secure cloud-based infrastructure. They expand and complement their payment solutions by delivering IoT-based applications that assist consumers with revenue management and fraud prevention. Consumers don't usually notice the IoT technology use. Still, most people have already used Stripe's IoT integrations if they ordered something from the online stores via their wearable devices.
Dynamics manufactures next-gen payment cards that enable real-time communication between a bank and a client. Their cards have display screens that a client can use to ask questions and receive instant support. The IoT-connected nature of the product allows banks to collect data over a client's location, transaction time, and type.
Mastercard partners with numerous companies to cooperate over developing products that automate and facilitate daily activities. For instance, the provider worked with Samsung over smart refrigerators re-ordering groceries; they also collaborated with General Motors designing IoT-connected key fobs; their partnership with Coin focused on promoting contactless payments via fitness bands, smartwatches, and other devices. On top of everything else, Mastercard uses IoT capabilities in fleet management to bring together data maintenance and payments.
The largest international financial institution integrated beacon technology to provide a highly personalized customer experience. They offered location-based servicing and enabled access to ATM lobbies at any time by using digital keys. The geofencing technology that they implemented allows providers to send relevant alerts and offerings to clients based on their location, making servicing more client-focused and convenient than before.
The company provides online merchants with the opportunity to accept a wide range of IoT transactions. They encourage retailers to embed buy buttons in mobile apps or within other digital channels that consumers prefer. That is a great way to facilitate buying and ordering processes across multiple devices, which helps win more loyal consumers and reach new audiences.
We are witnessing exciting shifts in the IoT field and might expect to see even more opportunities in payments and other sectors, such as logistics, manufacturing, healthcare, and more. The more connected devices emerge, the more data they gather, enabling accurate analysis and intelligent automation across various industries.
Banks and financial institutions can expect to bring down services costs, enhance security, expedite payment processes, and provide a next-level customer experience with broad adoption of the IoT technology. They may partner with technology companies to identify the IoT's best technology applications and key benefits for a particular business. After all, providers offering solutions that help consumers save money or complete payment processes automatically get more loyal clients and gain a competitive advantage.