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Table of Contents

Lead Story

Fostering a payments culture of giving

News

Industry Update

EMVCo to improve standard for e- and m-commerce

New payments player teams with Dallas Cowboys

Google the latest billion-dollar settlement denier to sue Visa, MasterCard

Softcard hits another snag, lays off staff

Features

The IoT - fact or fiction?

Education key to mobile adoption

ISOMetrics:
Data breaches across America

Views

Risk worth the reward High-risk: A macro perspective

Jeffrey I. Shavitz
Alternative Merchant Processing Inc.

Retail, why bite the brand that feeds you?

Dale S. Laszig
DSL Direct LLC.

Education

Street SmartsSM:
Pushing the limits of sales seasonality

Tom Waters and Ben Abel
Bank Associates Merchant Services

ISO goes to court: What to expect

Adam Atlas
Attorney at Law

Techology tools and tips to grow your business

Vicki M. Daughdrill
Small Business Resouces LLC

Company Profile

Expansion Capital Group LLC

New Products

Intelligent choice for connected,upscale dining

Owl
OMNI Brain Lab

Portfolio management to protect revenue, prevent chargebacks

Cardholder Dispute Resolution Network
Verifi

Inspiration

The Internet of people

Departments

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

January 26, 2015  •  Issue 15:01:02

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The Internet Of Things
The IoT - fact or fiction?

The latest tech headlines are abuzz with news about big data and trends emerging from the dynamic technical ecosystem known as the Internet of Things (IoT). This pithy term was coined in 1999 by British technology pioneer and Massachusetts Institute of Technology Auto-ID Center co-founder, Kevin Ashton. The term refers to the interconnectivity and interoperability between uniquely identifiable, Internet-enabled, embedded computer devices.

If this sounds suspiciously like a swanky, new name for the Internet, it isn't. The main difference between the IoT and the Internet is its make-up. The IoT refers to a broad network of personalized devices (or smart objects). These objects all perform isolated roles, and many are equipped with an ability to recognize and/or trigger actions. Virtually all of them use some form of radio frequency identification, near field communication (NFC), barcode, quick response code, or digital watermarking technology to tag or encrypt pieces of identifying data.

Data on the move

Granular data, exclusive to the object's role, is collected and then transmitted to another aggregation source using an IP-enabled address. Unlike customary machine-to-machine (M2M) technology frameworks, IoT devices can move data from object-to-machine, or in some instances, object-to-object, making IoT devices more nimble than traditional M2M devices. Some of the more well known IoT devices used today are Wi-Fi-enabled thermostats, wearable biometric devices, heart monitors, livestock chips, and field devices used by emergency services personnel.

Where IoT technology will ultimately lead is still under debate, but the network itself has been growing exponentially. Gartner Inc. predicts the number of IoT devices will reach nearly 20 billion by the year 2020. It is also believed the IoT will be the framework where certain mobile functions will become ubiquitous, including electronic payments at some point.

"In the payments industry, we use the term omnichannel to refer to the ubiquitous nature of payment-enabled devices," said Cleveland Brown, Payscout Inc. Chief Executive Officer and founder. "It refers to the process of interfacing all consumer touch points into one solution, and in order to accomplish this, the IoT is needed."

Brown also predicts IoT devices will become the means for global payment authentication. A person's habits, preferences, and even tangible and biometric credentials can be securely stored and accessed using a personal IoT device. Therefore, the possibility of a sophisticated remote device replacing our messy wallets and purses may be closer to reality today than ever before.

Brown envisions this happening – but with a twist – where the world will use an app-dependent commerce model. Real-time account billing will replace the credit card, and establishments will instantly recognize a patron when the individual is within physical range through a required NFC, Bluetooth or another radio frequency preference.

In addition to companies using this recognition-based system to target customer marketing messages, Brown forecasts that, upon recognition, "customers will be automatically authenticated to transact business through their device, and biometrics such as facial, voice, or eye recognition will also be added in as the capability of mobile devices continues to expand."

Tipping point 2015

While the world continues to move steadily toward an IoT network that will support this kind of vision, researchers are already marking 2015 as the tipping point for NFC-enabled devices and smartphone in-store payments. Duncan Stewart, Director of TMT Research at Deloitte in Canada, said, "2015 will be the first year in which all of the requirements for mainstream mobile payments – satisfying financial institutions, merchants, consumers and device vendors – have been sufficiently addressed."

Moreover, 60 percent of the 1 billion global wireless IoT devices expected in the network in 2015 will be bought, paid for and used by enterprises. Consequently, despite widespread media hype focused on consumer adoption of IoT devices to control thermostats, lights, and appliances, the worth of services enabled by IoT devices will surpass valuation of the devices themselves by nearly $60 billion.

As a result, software makers inside and outside the payments industry are scrambling for a piece of the action. Many observers believe it's only a matter of time before the world will be introduced to an IoT-enabled payments framework, which will no doubt change the electronic payment landscape forever. Brown summed it up with one, final comment: "It's a pretty amazing future and there are really no limits."

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems