The future of payments: A pool pump with a credit card?

Alpa Somaiya|10 Januar 2019
The future of payments: A pool pump with a credit card?

Press a button and your laundry detergent is ordered, delivered, and paid for. Your car knows when it needs repairs, books itself in, drives itself to the garage, and then pays for the service. Your fridge keeps track of what needs replacing, orders and pays for the goods. This sounded like a science fiction movie a decade ago, but thanks to the Internet of Things (IoT), it is all possible.

But what is the IoT? In a nutshell, the IoT is a collection of devices that connect to each other and services. These devices come in many forms, for example, smartphones and tablets, fitness trackers, home assistants like Amazon Alexa, air-conditioners and lights, cars, fridges and pool pumps.

IoT: The driver for a cashless society?

The growth of the IoT has been nothing short of meteoric and is expected to comprise 50 billion connected devices by 2020 – that’s six devices for every person in the world! These devices can all collect data, share data, interact with each, and then act on the information received. Machines will be trading with machines, and these transactions are estimated to be worth $27.62 billion by 2023.

The IoT is changing the relationship between industries, forging new connections between, for example, manufacturers, service providers, suppliers, and consumers. This is reshaping the payments industry, transforming the way that the world transacts. It is shifting the payments landscape towards one in which friction and human intervention are being gradually removed from everyday activities.

IoP: A force to be reckoned with

Today, payments are mostly initiated by people, whether it is through a credit card, a mobile wallet, or a device. The IoP (Internet of Payments) changes all of this. With IoP, the payment will be automatically triggered by a car or a domestic appliance, for example. The devices will detect when a purchase needs to be made, and seamlessly initiate payment on behalf of the consumer. A pool pump could request a service from the pool service company when its monitoring device registers an abnormal pH level, for example. Honda have also teamed up with Visa to develop technology that tells you when your petrol tank is running dry and lets you pay to refill it using an app connected to the in-car display

Even though IoP protocols are still evolving, IoP, when coupled with the cloud, big data, artificial intelligence and biometrics, has the potential to change completely the way we live our lives. With the increasing inter-connectedness of the world, the payments process may be taken out of our hands entirely. The connected environments that surround us will share information to deliver and facilitate highly personalized experiences that are solely based on our lifestyle choices.

This interconnectedness can, however, have a down side.

Connected security

As we have learnt from the rise in the cashless payments, and the concomitant rise in fraud, security is paramount when it comes to devices that send and receive information. If IoP is going to work, consumers need to trust the connected devices and the way in which their information is stored and transferred.

With so much personal information flying around, over which you have no control, some suggest that your smart watch or connected pool pump isn’t the product – you are. This is because your data can be collected and sold; it has a monetary value. As you buy more “smart” devices, you are giving up your privacy little by little.

The responsibility for the data will lie with everyone in a connected network: consumers, manufacturers, suppliers and banks alike. There will be a need to partner with tech companies to authenticate identities, ensure authorization, and ensure that transactions are genuine. Consumers will not want their fridge connected to their bank accounts, unless they can be sure that the technology is there to protect their data, and that the channel between the bank, consumer and merchant is secure. To ensure the success of the IoP, consumer experience will have to be prioritized.

Über den Autor

Alpa Somaiya

Alpa Somaiya

Senior copywriter/Editor

From science to health research to fintech, Alpa is a self-confessed jack-of-a-few trades. When not despairing about the use of the Oxford comma, she enthusiastically collates, translates and disseminates information for your reading pleasure, and with the hope that we all learn a little something along the way.

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