New innovations in IoT payments
Systems like ApplePay have yet to truly take off, but companies are already looking to the future of digital payments. Most consumers still have yet to bite. According to PYMNTS’ Apple Pay Adoption Tracker, only 16.6 percent of consumers had tried the platform as of October 2015. Still, this slow adoption rate isn’t stopping companies from thinking about the next stage of payments, where any connected device can be used to complete a transaction.
The near-field communication technology that powers Apple Pay and other contactless payment methods can be used in all kinds of devices, from watches to key fobs. While the potential implications of these innovations are exciting, companies also need to be careful about the implications for fraud.
Digital wallets everywhere
MasterCard recently announced it will release a series of connected devices that incorporate its payment technology, Digital Trends reported. To drum up enthusiasm for this project, MasterCard partnered with a number of brands to demonstrate what payment-enabled objects can look like. General Motors produced a key fob, Ringly came out with a new smart ring and designer Adam Selman created a clothing line that included MasterCard’s payment technology.
“Every device will become a commerce device and today, it’s possible,” Sherri Haymond, MasterCard’s SVP & Group Head of Digital Channel Engagement told Digital Trends. “We want to show the world what we’re talking about with these different prototypes.”
Making it easier to accept payments
MasterCard isn’t the only brand looking to capitalize on NFC payments. Intel is also working on technology to bring payment tools to connected devices, called the Intel IoT Retail Gateway Reference Design for Intelligent Vending, according to a news release from the company. The technology will make it easier for companies to retrofit older machines to accept mobile payments.
Intel also partnered with Ingenico to bring this technology not only to vending machines, but to kiosks and digital signage as well, PYMNTS reported. This would mean retailers could create advertising signage that allows customers to make a purchase as soon as they see it.
While NFC payments are fairly secure, no method entirely eliminates the possibility of fraud. It’s important for brands to invest in fraud prevention systems feedzai to ensure customer data remains safe from hackers. According to Near Field Communication.org, there are a number of potential security risks, including eavesdropping, where a third-party picks up signals from a transaction. It’s also possible for fraudsters to manipulate the data being sent to or from a reader or intercept the information flowing from one device to another.
The new world of IoT payments could hold great opportunities for retailers and customers alike. However, companies who want to take advantage of these new innovations will need to keep security top of mind. As the payments environment continues to evolve, it’s wise for brands to invest in a solution that won’t remain static as fraudsters become more intelligent. IoT could completely transform the way people pay for goods and services, but investing in security will be critical for success.