The digital payment industry has been in quite a buzz this week. Only a day ago, PayPal made a horrible mistake and sent a letter to a deceased customer stating that she breached the policy by ‘dying’ and the company is taking legal actions against her. Then only a few hours later, Google brought its P2P payment service ‘Google Pay Send’ to its digital payment solution ‘Google Pay’, solidifying the service further by adding features like boarding passes and event tickets.

We have known from the start of the year that the fluctuations in the cryptocurrency market hinted at some long-lasting murmurs the industry, and with digital payment becoming more mainstream around the world, it seems like these murmurs are going to last even longer than the investors originally presumed.

Investors are already exploring new ways of using cloud and connected platforms for innovative payment services. Although, a new way of using IoT in such services like that of ACH payments, is currently being developed.

IoT in Digital Payments

In December 2017, Forbes published a roundup report on all the IoT forecasts. Here are the major predictions that were mentioned in the report.

• The global IoT market will grow to $457 Billion by 2020.
• Leading industries including Manufacturing, Logistics, and Utilities will have spent $120 Billion on IoT by the year 2020.
• By 2020, B2B IoT segments will be generating over $300 Billion annually.

Although the report clearly demonstrates the growing market and potential of IoT in leading industries, it left a huge opening  for the drastic growth of the IoT market through other industries, this is due to unexplored features of this technology. However it turns out that the investors have tapped into one of these unexplored areas, Digital payments.

A report published in the Payments Journal by Mercator Advisory Group, states that presently, the digital payment market is led by the services that work on the zero-sum game. So, many of the prominent service providers in this area are using the ACH network to directly debit customer accounts for each payment they make. The author, however, suggests that by manipulating IoT, new dimensions of the industry can be exploited to create digital payment models that benefit everyone, ‘by creating new payments from nothing’!

Take Amazon Alexa for example. The virtual assistant’s primary role through smart speakers is to order directly from Amazon. This service alone streamlines the company’s revenue by using other add-on services, which are also based out of users’ preferences. Meaning Amazon has added an additional monetisable value to the IoT device that it can then use to provide additional advantages to the users.

The essential idea here is to optimise the different types of revenue that IoT devices can stream for the company, and then issuing loyalty rewards to compel the customers to use their IoT-enabled payment services for ease of access, as well as, other incentive rewards the company would offer.

Resources:

https://economictimes.indiatimes.com/magazines/panache/google-pay-now-has-peer-to-peer-payments-service-becomes-one-stop-destination-to-send-and-ask-for-money/articleshow/64944548.cms
https://www.forbes.com/sites/louiscolumbus/2017/12/10/2017-roundup-of-internet-of-things-forecasts/#5a762cff1480
http://paymentsjournal.com/payments-and-the-internet-of-things/
https://www.usatoday.com/videos/money/nation-now/2018/07/11/paypal-tells-dead-woman-shes-breach-contract-dying/36790139/