Guest Post: How IoT and Invisible Payments are Redefining the POS

By Michel Léger, EVP of Innovation, Ingenico Group

It’s no secret that new technology is transforming our daily lives. By 2020, Gartner predicts there will be 20.4 billion connected products in the world – 10 percent of which will include a payment function. As a result, consumers will have more opportunities to make purchases through the products, services and devices that they interact with every day, further transforming the shopping experience and making payments more accessible than ever before.

While IoT might sound like a buzzword, the technology is already bringing traditionally static and “low-tech” objects to life. Today, you can install a smart refrigerator that sends a notification to your smartphone when it is time to repurchase an item, or buy a connected lightbulb that switches on and off with a simple voice command. Think about it, what’s next? It’s the integration of payment capabilities into these IoT-enabled products, or personal devices such as wrist wearables syncing with a credit card and enabling the wearer to tap their wrist against a terminal, pay for an item, and leave the store without ever taking our their wallet.

Payments and the actual transaction taking place are quickly moving out of focus as customer experience takes center stage. Invisible payments are continuing to gain momentum, enabling enhanced customer experiences while also benefiting vendors. Through the convergence of IoT and Near Field Communication (NFC) technology, consumers are able to pay more conveniently.. With more payment-enabled products entering the market, the definition of “point of sale” continues to evolve, providing consumers with an interactive experience like never before.

In Your Car

When it comes to the future of payments, one of the most powerful connected objects will be vehicles. In the near future, drivers won’t think twice about stopping at a toll, or inserting their credit card at the gas station. IoT will soon be used to transform cars into a “service hub” that enables drivers and passengers to complete transactions from inside their car.

Take the drive-thru, for example. Implementing IoT payment technology inside a vehicle eliminates the need for drivers to insert their credit card into a physical terminal, enter a PIN and hand the terminal back to the seller before collecting their order. In the future, IoT technology will enable the transaction to take place on an NFC-enabled screen on the car’s dashboard, eliminating oversaturation across the purchasing journey and providing a faster, more streamlined experience.

Invisible payments are also providing new business opportunities for rental car companies, who will soon be able to offer vehicles equipped with on-board payment capabilities. At the time of pickup, customers have the option to purchase additional services, like a GPS or roadside assistance, but these add-ons are often expensive, and drivers are unsure if they will need them. With IoT-enabled rental cars, drivers will be able to purchase add-ons at any time throughout their rental period, as needed. Similar to the way that smartphone apps offer “in-app” purchases to buy new functions, vehicles will soon be capable of accepting “in-car” payments.

While You’re Traveling

Imagine you’re taking an international flight, and are tempted by the comfort of a first-class seat. In the future, airlines could install a small target near each seat that would illuminate to indicate its availability. Using IoT and NFC technology, any passenger could walk up to a vacant seat, tap their smartphone on the target and purchase that seat for the flight using a mobile wallet.

Today, hotels are embracing IoT technology faster than almost any consumer-facing industry. Instead of waiting in line to check-in, handing over a credit card and communicating in-room preferences to an employee, travelers will soon be able to interact with connected screens in the lobby that enable them to select a room and purchase add-ons. Similar interfaces can also be installed in hotel rooms, allowing guests to purchase room service or movies will the tap of a finger a voice command. With IoT and NFC technology, previously passive screens are becoming new interfaces that can accept payments and provide a more enjoyable customer experience.

Most consumers today have experienced the power of invisible payments when using a ridesharing app, or paying with a mobile wallet. IoT is already transforming traditional payment methods, and these applications are only the beginning. Consumers are excited about an “anywhere, anytime” payment model that will further automate and simplify their daily lives. However, FinTechs and retailers must remember that these possibilities cannot become a reality without the trust of consumers. The introduction of new payment technology is exciting, but it means that investment in security and fraud prevention is even more important to reach widespread adoption and drive the payment industry into the future.

As consumer devices become more connected, interoperability will be critical for success. The focus on providing a seamless customer experience tends to be fragmented, with focus just in-car or in-store, rather than across multiple touchpoints. As IoT-enabled devices become increasingly intertwined with consumers’ daily routines, the customer experience needs to be thought of holistically, with the goal of interconnecting all aspects of consumers’ lives. To do this requires collaboration from multiple market innovators to deliver a truly seamless, future-forward experience to consumers.

About Michel Léger

Michel Léger was appointed to EVP of Innovation in January 2015, bringing over 25 years of international experience in electronic payments. He joined Ingenico Group in 2010 to take over management of the company’s EMEA segment and became EVP of Marketing & Global Sales in 2013. He began his career with Schlumberger in 1985 where he was in charge of sales and marketing for the North American market. In 2003 he was named General Manager of the Payment Terminal Division for Axalto (ex Schlumberger) and held a similar position at Gemalto until 2009. He also helped develop Gemalto’s e-payment market on a global scale.

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