The payment complexities of the Internet of Things

May 30, 2017

by Nick Telford-Reed, Director of Technology Innovation for Worldpay

Worldpay is a platinum-level sponsor of Subscribed San Francisco. Please join us at Subscribed on June 5-7, 2017 for the only conference in the world dedicated to the subscription economy.

And don’t miss Nick Telford-Reed, Director of Technology Innovation for Worldpay, leading his session on The Internet of Things & Payments on June 6.

The global population has exploded in the last 30 years from five billion to seven billion. By 2020 five billion people will be online, with 25 billion devices and machines using the internet.

Going far beyond the devices we currently use to connect online, the Internet of Things (IOT) is the idea that all types of devices and machines will share data and services – from smart street lighting to connected cars. Sensors are being embedded in all manner of devices – some trivial things like toys but some transformative things like health and energy.

Subsequently, the way we engage with machines and devices will fundamentally change as they begin to ‘understand’ and ‘respond’ to our behaviours. This engagement will dramatically change our day-to-day lives. For example, smart homes could pay for premium internet autonomously for a viewer’s favourite show, refrigerators could re-order groceries when supplies are running low and houses and shops could negotiate and pay each other for surplus energy.

IOT may still seem a great mystery but it presents a significant opportunity for you and your customers, whatever your business size. Besides the plethora of new application areas for internet connected automation to expand into, IOT is also expected to generate large amounts of data from diverse locations that is aggregated very quickly, increasing the need to better index, store and process such data. Where there is a transfer of data and services, there is an exchange of value and therefore a payment is required.

The facilitation of these payments is the challenge that needs to be addressed. Devices will be required to make payments autonomously, and with the same ease in which your customers expect to connect. However, there are a number of complexities to overcome.

In terms of payment liabilities, the current regulations and legal responsibility are not fit for purpose in a ‘connected’ world. While legislation is in draft, businesses need to understand the limitations of the device along with the type of payment made.

Ascertaining the identity of the customer is also key. How can you identify if the customer has the authority to authorise a payment? Where is the customer based when the transaction is made?

Further complexities lie in enabling automatic chargebacks or refunds. How can a device automatically claim a refund if a service has been paid for but not delivered, or the device is charged in error?

Register now for Subscribed San Francisco to find the answers to these questions, and further information around the payment considerations for IOT, innovations that are in development and how to capitalise on the opportunity the connected world presents to your business.