How Connected Devices are Changing How We PayOct 29, 2019
Commerce is taking the latest step on its digital journey. From credit cards to online to mobile, we have now arrived at payments via the Internet of Things (IoT) and voice-based transactions. You can now order nearly any product or service simply by asking for it.
This seemingly endless stream of connected devices has begun to fundamentally alter how we shop and pay. Here’s a brief sketch of the connected payment landscape.
Nearly Everyone Is Connected
Connected devices are now so common across the U.S. that nearly 80 percent of Americans owned more than just a smartphone in 2018 (up from 75 percent in 2017), whether it’s a smart speaker in the kitchen, a car that can order dinner, or a watch that pings you when your meter is about to expire.
Teenagers and senior citizens alike use smart speakers to order pizza or groceries, or use an app on their phone to pay for gas, or Siri to find the closest parking spot and hit up the meter for them (or pay for more time).
Nearly Everything Is Connected
The internet brought with it new ways to pay. Now, with the number of connected devices expected to approach 20 billion by 2020, your customers will demand even faster and more convenient payment methods that use data to provide a seamless, safe experience.
So how exactly do they want to pay?
From their cars
Connected cars are becoming the norm, so much so that nearly all new cars will be internet-ready by 2020. Cars in the very-near future will be able to self-diagnose when repairs are needed, talk to other cars to avoid accidents, and ping the driver with alerts to save on insurance.
The commute, arguably the most frustrating part of any worker’s day, is fast becoming an opportunity for commerce, with 38.5 percent of drivers using apps to pay in advance for coffee, gas, and parking. And car companies have taken notice, as seen in Honda’s partnerships with Visa, MasterCard, and PayPal.
From their homes
Smart speakers like Google Home and Alexa have automated many common household chores. This has grown to include grocery shopping and delivery, scheduling and payment for plumbing and heating services, and, not surprisingly, ordering everything your home might need from Amazon.
From their wrists
Payment from smart watches is nothing new, whether it’s hailing an Uber, transferring money from your bank, or contactless payment with Google Pay. But the possibilities for growth are exciting, including a complete digital wallet that also stores loyalty cards.
Voice Is the New Black
Voice-activated payment is one of the newest and most highly-anticipated developments in the industry. Just a few years ago, this idea seemed to still be the domain of science fiction.
Times have quickly changed—ownership of voice-activated devices nearly doubled from 2017 (14 percent) to 2018 (27 percent). And people use them to seriously shop; 28 percent buy clothing and accessories, 22 percent purchase electronics and other digital goods, 20 percent buy groceries, and 15 percent order takeout.
Brick-and-Mortar Should Worry
Connected devices are only speeding up what was already a growing shift from traditional brick-and-mortar stores to the online marketplace. Groceries are still an outlier, but 78 percent of consumers say the appeal of avoiding the hassles of visiting a physical store drives them to buy online, and fewer than 50 percent of them regularly shop at a brick-and-mortar outlet.
Connected devices have sped up this trend. Rates of auto-pay are growing, particularly in instances in which customers see the checkout process as particularly stressful or time-consuming, such as buying gas (49 percent), buying clothing (41 percent), paying for parking (40 percent), and going to restaurants (39 percent).
Be Part of the Solution
Consumers have long wanted to get rid of—or at least minimize—the process of paying for things that simply take up a lot of their day: bills, healthcare, clothing, groceries. Connected devices have finally brought that dream much closer to becoming a reality.
Will your business be on the forefront of this revolution? A fully connected payment platform is a great way to get there.