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Bringing commerce to the IoT

By Jim McCarthy, EVP of Innovation and Strategic Partnerships • Visa

February 16, 2017

Bringing commerce to the IoT and making long lines obsolete

As the Internet of Things (IoT) continues to grow and drive a more connected world, it is changing the way we live, shop and pay by moving data and the point-of-sale to wherever the consumer wants it to be. Visa’s new global collaboration with IBM is designed to bring the point-of-sale everywhere by allowing businesses to introduce secure payment experiences quickly to any device connected to the IoT. Our new collaboration with IBM is rooted in a shared vision and belief that we can securely embed payments and commerce into any device—from a watch to a ring to an appliance or a car.

Let’s consider the car. Experts estimate there will be 380 million connected cars by 2021. At Visa, we’ve been working with a number of car manufacturers (and other companies from across the car ecosystem) to build and test prototypes for car-based payments since 2014. By connecting the car ecosystem to the Watson IoT Platform and enabling the car with secure payment functionality, imagining the many possibilities becomes easy.

Drivers could be alerted when their smog certification is about to expire or if a specific car part needs replacing, responding by either scheduling a service appointment or ordering the part that has the combined lowest cost and fastest shipping time. The range of other options is virtually limitless, extending to insurance offerings, paying for gas without a physical card or zipping through the drive-thru that much faster because the payment part of the transaction no longer exists.

What is most fundamental in bringing a commerce-based IoT to life is ensuring its security. For this vision to flourish consumers must feel secure and that is where Visa’s work with IBM will first begin. Of the 6,000 clients already utilizing the Watson IoT Platform today, they will now be able to more easily infuse secure payments across their entire product lines using the Visa Token Service, a new security technology that replaces sensitive payment account information found on payment cards with a unique digital identifier.

For IBM’s Watson IoT clients, we will make the Visa Token Service accessible through a network of token service providers (TSPs) as part of our Visa Ready partnership program. We created the Visa Ready program to help quickly certify emerging, third-party payment solutions to ensure they meet Visa’s security standards and specifications, and have seamless and secure global acceptance. Being able to be confident that your Visa account will work the same way on an app from your phone or at a shop in Dubai is another hallmark of Visa that is essential for us to maintain.

As this tidal wave of new payment accounts approaches—today, Visa has three billion account holders and conservative estimates expect 20 billion devices in just three more years—removing sensitive account information such as the 16-digit account number from the system was an essential part of preparing for this very digital future. We consider the tokenisation of digital payments the newest component in an always-evolving, and very comprehensive, security strategy to identify and prevent fraud.

At Visa, we fundamentally believe you can be everywhere you want to be – and now pay with everything you want to use. We have spent the last several years investing in and preparing for this future and that payments will be at the core of not only devices, but also experiences. Working with Watson IoT is a major step in getting us to a place where we can deliver secure payments to “virtually anywhere” and transform that long retail line to a line of one: you.

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