More than 8 in 10 Americans expressed strong interest in M2M payments that would use “Internet of Things” (IoT) technology and automated machine-to-machine (M2M) payments, a new study from Visa and PYMNTS-dot-com reveals. The study, entitled “How We Will Pay” was released at the WIRED Business Conference alongside Visa’s announcement that more than 12 banks are joining its token service provider program.
“Consumers’ growing appetite for all things digital” continues to evolve and expand, concerns regarding IoT and online privacy and security notwithstanding, Visa highlights, citing fast growing consumer uptake of voice-controlled digital assistants as an example. Research analysts at the Pew Research Center make the same point in a new study.
Visa and PYMNTS determined that aside from smartphones, computers or tablets, three-quarters of consumers have at least one other connected device. More than 8 in 10 (83%) said connected devices save them time and reduce friction when making purchases by “creating an unattended checkout experience.”
Interest in M2M Payments
Automated M2M payments were of interest to all survey respondents. The prospect of seamless auto-pay service at gas stations and when making in-store purchases topped the list of applications of interest at 40 percent.
Clearly, consumers value the prospective advantages and benefits of IoT devices and M2M communications more highly than they fear the security and privacy threats and vulnerabilities such communication presents.
Nevertheless, consumers continue to place a high value on trust and security, the survey revealed. More than three-quarters of respondents expressed concerns regarding data privacy of connected devices. Just shy of 7 in 10 (69%) cited concerns about order verification and accuracy. Other key findings include:
- Connected device ownership is an increasing trend. The average consumer owns 4.4 connected devices including game consoles (47 percent), activity trackers (41 percent), smartwatches (15 percent), voice-controlled assistants (14 percent), connected thermostats (9 percent) and virtual reality headsets (7 percent).
- Consumers with more connected devices make more purchases. Additionally, connected consumers make more purchases across more product categories than those with just one connected device, with apparel and footwear leading the way.
- Buying things using a connected device is widespread. In 11 out of 19 product categories ranging from healthcare to accessories to food, 50 percent or more of the consumers studied made online purchases through a device within a week of the study. The top three categories included travel services, household repair and entertainment.
As an international joint venture association made up of bank credit card issuing companies, Visa is keen to keep a firm hold of its leadership role in facilitating consumer purchases and commerce more generally. That has led it to ramp up its investment in digital, electronic payments and jump headfirst into the arcane worlds of digital cryptography and online security and privacy.
Furthermore, Visa is looking to leverage the trust and legitimacy it and its bank partners have gained in order to address consumer concerns regarding the security and privacy of IoT and M2M payments. That’s where its token service provider program comes in. Via the program, Visa aims to add automated, M2M payment capabilities to the rapidly expanding range of emerging consumer IoT devices, appliances and equipment.
Nearly two-thirds (65%) of survey respondents said credit card issuers and bank card networks are the institutions they trust most when it comes to paying for goods and services, whether it’s via retail channels, social networks or mobile devices.
“The category of payment-enabled devices is still in very early days, yet this research shows just how much consumer interest and understanding is starting to build for what these experiences can offer,” said Jim McCarthy, Visa executive vice president, innovation and strategic partnerships. “As we work with our banking partners to make it easier to put payment credentials onto devices, a few new consumer use cases will inevitably break through and start to really change the game.”
It seems there be many more deeper layers to peel away before we fully realize, comprehend and address all the questions and issues revolving around fast emerging IoT and M2M deployments and use, including the question of “How Will We Pay.” The full report is available on PYMNTS’ website.