The payments industry is innovating at breakneck speed and the future of payments looks extremely unpredictable with numerous trends set to revolutionize it in the coming years. From our point of view, we believe there are some interesting trends that are going to shape this industry in the coming years and IoT (Internet of Things) is just one of the prominent technologies the world is looking forward to. In this post, we’ll explain about the way IoT works and its potential impact on the Fintech industry.
What is IoT and How Does it Work?
Imagine a future where cars automatically research and renew their insurance, use onboard driving and performance data to find a deal tailored to the driver’s history and where insurers offered discounts to good drivers traveling shorter distances in urban areas. IoT enables a world that’s well connected with the ability to communicate in an intelligent fashion. For example, connected kitchens automatically re-ordering groceries as they are consumed, then report on weekly diet and exercise performance to a device like fitbit.
The physical world will become one big information system, thanks to the Internet of Things
The idea is that if we had computers that knew everything there was to know about things – using data they gathered without any help from us, it would be able to track and count everything, thereby reducing waste, loss and cost. It would then be possible for us to exactly know when things need to be replaced, repaired or recalled.
With each passing day the use of connected devices and the applications of smart sensors is increasing and with it bring about to change to virtually every aspect of our lives. Right before our eyes traditional industries are being transformed in ways we never imaged. IoT is a game changer for life as we know it and every brand wants to explore the possibility to explore it. IoT devices such as Alexa are being used in homes to search, play music, book ticket, control lighting, appliances and so on.
The Internet of Payments
IoT is now a reality and soon would enable electronics devices to preemptively fulfill needs based on data, would want the consumers to have efficient payment experience. Consumers’ payment experiences would also be seamlessly integrated into their everyday routines. With this new playing field, IoT will only further increase transaction volumes and demands around payments. Thereby creating a need for robust payments infrastructure – forming a fundamental component to sustained success.
The IoT enables a new generation of rapid and intuitive payment methods, from smartphone wallets to wearables. We could very well see traditional POS systems be replaced in the future. Amid this global transformation, it’s not hard to imagine that cash will become defunct. Organizations that can harness IoT to deliver a better customer experience at a lower cost could gain a competitive advantage.
50 billion connected devices by 2020
How does the future of payments look like?
Digitization is the talk of the town and everyone is talking about it these days. Every sector is touched by IoT – be it manufacturing, professional services, agriculture or even banking industry. But, it’s the payment industry that has been leading the front in this regard. There are still plenty of new opportunities deriving from a more digitalized world. From moving towards electronic payments to looking at the game-changing blockchain technology, we are surely looking at a cashless future.
Consumer electronics like Amazon’s Echo, for instance, will eventually initiate payment transactions on behalf of consumers. As adoption of these new technologies increases, businesses will have to think outside the box to anticipate their customers’ needs. Success will ultimately come down to whether or not the payments infrastructure in place can meet increased demand. Speed, efficiency, and security are keys to customer satisfaction as IoT-enabled devices become more commonplace.
The Future of Payments is Cashless
In our opinion, central storage of payment instruments, tied to a user account, is the key in the IoT world. One where there is no need to enter card numbers, expiry dates nor CVC codes. If payment companies want to lead, then payment devices would need to be linked to the user accounts. Also, they need to offer a full digital eco-system of payment acceptance solutions along with loadable user accounts. These will be easily accessible on multiple programming interfaces, but will be built on one single digital platform.
Well, that’s about the first payment trend! Stay tuned and we’ll be discussing more future trends that are likely to have a huge impact on the payments industry in the subsequent blog posts.