Cellular connectivity has become a very popular option for POS terminals and was incorporated in 52 percent of the devices shipped in 2023. The wireless technology has an important role in facilitating the global adoption of electronic payments, as it enables the rollout of POS terminals to many new market segments and parts of the world where the fixed line telecommunications infrastructure is less developed.

The installed base of cellular POS terminals reached 137.8 million in 2023.

Berg Insight forecasts a CAGR of 8.2 percent between 2023 and 2027, resulting in a total of 188.9 million cellular POS terminals at the end of the forecast period.

Berg Insight projects at the same time that the global installed base of NFC-ready POS terminals will grow at a compound annual growth rate (CAGR) of 7.8 percent from 235.1 million units in 2023 to 317.9 million units in 2027. As a result, more than 95 percent of the world’s POS terminals will be NFC-ready in 2027, up from 85 percent in 2023.

Johan Fagerberg, Principal Analyst at Berg Insight, said:

“The Android POS terminal category has become very popular lately. About a third of the POS terminals sold in 2023 were Android POS terminals.”

The mPOS terminal market is growing at about the same rate as the traditional POS terminal segment. mPOS is the use of consumer-oriented mobile devices such as tablets and smartphones that function as a point-of-sale terminal to facilitate payment card transactions through a connection to a card-accepting reader. The global installed base of mPOS terminals totalled an estimated 109.9 million units in 2023. The installed base of NFC-ready mPOS terminals grew to 79.1 million units during the same year as NFC penetration reached 72 percent worldwide. Berg Insight projects that the installed base of NFC-ready mPOS terminals will grow at a CAGR of 12.3 percent between 2023 and 2027 to reach 125.9 million units worldwide. This corresponds to a penetration rate of 88 percent in 2027.

“Today, the mPOS device segment has also started to face competition from SoftPOS solutions. SoftPOS technology allows businesses to accept payments via a standard iOS or Android device”, concluded Mr. Fagerberg.

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The landscape of payments is rapidly evolving, driven by the Internet of Things (IoT) and its profound impact on how we conduct transactions. The era of smart payments has arrived, bringing innovative solutions that enhance convenience, security, and efficiency. In this article, we will explore the role of IoT in smart payments, its applications, benefits, challenges, and the future of this transformative technology.

The Intersection of IoT and Payments

Smart payments represent a significant shift in the way we handle financial transactions, offering seamless and secure payment methods that leverage IoT technologies. IoT is all about interconnected devices, sensors, and systems, and when applied to payments, it opens the door to a range of possibilities.

Key Applications of IoT in Smart Payments

1. Contactless Payments

IoT-enabled devices, such as contactless payment cards, wearables, and mobile apps, allow users to make payments by simply tapping or holding their device near a point-of-sale (POS) terminal. This technology is not only convenient but also reduces physical contact, which has become more important in the context of public health.

2. IoT in Retail

In retail, IoT is enhancing the payment experience through features like smart kiosks and automated checkout. Customers can scan items and make payments without going through a traditional checkout process, streamlining the shopping experience.

3. Mobile Wallets

Mobile payment wallets like Apple Pay, Google Pay, and Samsung Pay use IoT technology to enable secure, contactless payments using smartphones or smartwatches. These wallets are widely accepted by retailers and provide users with a digital representation of their payment cards.

4. IoT in Transportation

IoT is revolutionizing the way we pay for transportation services. Smart cards and mobile apps allow commuters to pay for public transportation, parking, and tolls seamlessly, while IoT sensors monitor traffic and manage congestion.

5. Wearable Payments

Wearable devices equipped with payment technology, such as smartwatches and fitness trackers, enable users to make payments without the need for physical cards or cash. These wearables offer a convenient and secure payment method.

6. Internet-Connected Appliances

Smart appliances and devices in the home can be connected to payment services, enabling automatic reordering of household supplies when items are running low. For example, a smart refrigerator can place an order for groceries when specific items are depleted.

7. IoT in Healthcare

The healthcare sector is using IoT for patient billing and insurance claims. IoT devices and sensors are used to monitor patient health, and payment transactions can be initiated automatically based on the care provided.

Benefits of IoT in Smart Payments

The integration of IoT in smart payments offers numerous advantages:

1. Convenience

IoT-enabled payment methods, such as contactless and mobile payments, are highly convenient, saving time and reducing the need for physical payment cards or cash.

2. Security

IoT payments often employ strong security measures, including encryption and tokenization, to protect financial data. The use of biometric authentication, such as fingerprint or facial recognition, further enhances security.

3. Efficiency

Smart payments streamline the payment process, reducing wait times and making transactions more efficient. This is particularly valuable in high-traffic retail settings.

4. Contactless Transactions

Contactless payments minimize physical contact between individuals and surfaces, a feature that has become especially relevant in times of public health concern.

5. Real-Time Transaction Tracking

IoT provides real-time transaction tracking and notification, ensuring users are immediately informed about any payment activities on their accounts.

6. Enhanced Personalization

IoT enables personalized offers, rewards, and discounts based on user behavior and preferences, making the payment experience more tailored.

Challenges and Considerations

While IoT in smart payments offers numerous benefits, it also poses challenges and considerations:

1. Data Security

The collection and transmission of sensitive payment data raise concerns about data security. Robust security measures must be in place to protect financial information.

2. Privacy

Users’ personal data must be treated with care, and consent for data collection and usage must be clearly established.

3. Standardization

IoT devices and systems must be compatible and standardized to ensure seamless data exchange and integration. Common protocols and standards are essential for achieving this.

4. Regulatory Compliance

IoT payment systems must adhere to regulatory requirements, particularly regarding data protection and financial transactions.

5. Adoption and Trust

The adoption of smart payment methods may require user education and a cultural shift in how people think about traditional payment methods.

The Future of IoT in Smart Payments

As technology continues to advance, the future of IoT in smart payments looks promising. Here are some trends and developments to watch for:

1. Enhanced Biometrics

The use of biometrics, such as fingerprint and facial recognition, for authentication and authorization will become more widespread, improving security and convenience.

2. Cross-Device Payments

IoT will enable payments to seamlessly move across devices. For example, a user may initiate a payment on a smartwatch and complete it on a smartphone or vice versa.

3. Voice-Activated Payments

Voice assistants like Alexa and Google Assistant will support voice-activated payments, making it easier for users to complete transactions using only their voice commands.

4. Digital Currencies

IoT will play a significant role in the adoption of digital currencies and central bank digital currencies (CBDCs), which can streamline international transactions and reduce currency conversion costs.

5. Augmented Reality (AR)

AR will enhance the in-store shopping experience, allowing users to virtually try on products and make purchases through immersive, interactive interfaces.

Conclusion

The Internet of Things is driving the evolution of smart payments, offering enhanced convenience, security, and efficiency. Challenges related to data security, privacy, and adoption must be addressed to ensure that the benefits of IoT in smart payments are fully realized.

As IoT technology continues to advance, it will remain a driving force in smart payments, offering a glimpse into a future where payment transactions are seamless, secure, and tailored to individual preferences, significantly transforming the way we handle our finances and make purchases.

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A new study released today by Visa and PYMNTS.com, entitled “How We Will Pay,” found that more than 80 percent of Americans have a strong interest in using connected devices to make purchases, with a keen eye toward security and data concerns.

The study was announced at the WIRED Business Conference where Visa is introducing more than a dozen new global partners into its token service provider program to bring payments to new form factors as the Internet of Things (IoT) evolves alongside consumers’ growing appetite for all things digital.

More Spending, Across More Devices, in Less Time

As the use of voice-controlled assistants and wearable devices become more commonplace, consumers are citing adoption benefits such as saving time, more frictionless payments, and efficiency with day-to-day tasks. With benefits such as these, it is no wonder that the number of connected devices has increased to 4.4 devices per person on average in the age of the IoT.

The study found that 75 percent of consumers have at least one connected device, in addition to their smartphones, computers or tablets. 83 percent recognize those devices as saving time and reducing friction when making purchases – subsequently creating an unattended checkout experience, regardless of device or platform. This seamless purchase experience is of interest to all respondents, with auto-pay at the pump and in-store topping the list at 40 percent.

“How We Will Pay” Study Fast Facts

• Connected device ownership is an increasing trend. The average consumer owns 4.4 connected devices including game consoles (47 percent), activity trackers (41 percent), smartwatches (15 percent), voice-controlled assistants (14 percent), connected thermostats (9 percent) and virtual reality headsets (7 percent).
• Consumers with more connected devices make more purchases. Additionally, connected consumers makes more purchases across more product categories than those with just one connected device, with apparel and footwear leading the way.
• Buying things, using a connected device is widespread. In 11 out of 19 product categories ranging from healthcare to accessories to food, 50 percent or more of the consumers studied made online purchases through a device within a week of the study. Top three categories included travel services, household repair and entertainment.

Banks and Payment Networks Help Ease Trust and Security Concerns

The study also showed that as speed and convenience continue to drive adoption of connected devices, consumers still place high value on trust and security. Importantly, the more connected a consumer is the greater their concern is about their financial safety. When asked, more than 75 percent of respondents cited ‘data privacy,’ while 69 percent cited ‘order verification and accuracy.’

Respondents also place a greater trust in banks and networks to enable payment via connected devices. Over 65 percent cited card issuers and bankcard networks as the institutions they trust most to enable those experiences, over retail channels, social networks and mobile device manufacturers.

Jim McCarthy, executive vice president, innovation and strategic partnerships, Visa Inc, said:

“The category of payment-enabled devices is still in very early days, yet this research shows just how much consumer interest and understanding is starting to build for what these experiences can offer. As we work with our banking partners to make it easier to put payment credentials onto devices, a few new consumer use cases will inevitably breakthrough and start to really change the game.”

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Make cashless, contactless payments with potentially the most technologically advanced ring in the world. PayEnable empowers almost any product to become a wearable payment device. $500 billion in transaction volume by 2020 projected for wearable payments.

On Track Innovations Ltd., a global provider of near field communication (NFC) and cashless payment solutions, today announced the launch of its latest innovative PayEnabled device –the Ring of Things.

The sterling silver and onyx designed ring is a payment device packed with the latest Internet of Things (IoT) technologies including secure payment, gyro-based motion control and smartphone notifications.

The Ring of Things is a vivid example of OTI’s PayEnable platform’s versatility in turning ordinary products into the latest and coolest smart payment devices. Industries that can benefit from using PayEnable technology include jewelry, fashion, automotive, banking, travel, smart home and entertainment.

The wearable payments market is forecast to grow at 177% per year between 2015 and 2020, accounting for an annual $500 billion worth of transaction volume by 2020, according to Tractica.

“It is a very exciting time to be part of the Internet of Things revolution,” said Shlomi Cohen, OTI CEO.

“The tiny form factor and easy to integrate nature of our payment technology is a great fit for any wearables manufacturer wanting to gadgetize and add secure cashless payment functionality to their existing products.”

PayEnable greatly simplifies the difficult and costly processes manufacturers face when trying to independently set-up secure payment systems for their products. PayEnable also deals with the technical and regulatory pain points, making it a very attractive, cost effective proposition for manufacturers who want to enter the booming wearables market.

PayEnabled products like the Ring of Things are feature rich and can support a wide variety of applications including: cashless payments, closed-loop payments, loyalty and reward programs, gift cards and even advanced features like in-store promotions, and brand authentication (anti-counterfeit).

A tiny computer platform integrated into the ring accurately senses motion and wirelessly transmits in real time either raw or processed data to any external device. This allows the Ring of Things to communicate with other smart devices such as handheld devices, smart TVs, virtual reality headsets, etc. enabling natural and seamless motion control for payments, gaming, entertainment, and fitness.

OTI collaborated with UK-based DigiSEq whose Provisioning as a Service platform provided OTI complete control over the processes and allowed secure provisioning of The Ring of Things in the manufacturing facility. The collaboration with DigiSEq provides OTI’s clients with the ability to provision their PayEnabled products in their manufacturing facility or in the stores – cutting costs dramatically and provides unprecedented flexibility.

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Solution Designed to Benefit Australian Operators of Wireless Payment Device Fleets

Telstra and Transaction Network Services (NYSE: TNS) have announced a partnership that will benefit Australian organizations operating wireless payment devices in the high-growth Machine-to-Machine (M2M) environment.

TNS is introducing the Telstra M2M Wireless Control Center to provide an enhanced managed wireless service. The solution will double TNS’ network reach in Australia and streamline operations through a single web-based interface for SIM card ordering, provisioning, activation and management. The platform will also help TNS with fraud management through its comprehensive usage alerts engine and real time reporting.

The TNS solution benefits operators looking to minimize the cost of provisioning, logistics, data usage fees and fraudulent use of M2M assets in the Australian eftpos and ATM market.

Mike Cihra, Director M2M and Partners at Telstra, said:
“Telstra is pleased to partner with global payments expert TNS as it seeks to better connect its customers to payments services. Using our new M2M Control Centre gives TNS more control and flexibility so it can provide Telstra M2M SIM cards to Australian payment device owners when they need them. In turn, TNS customers can now tap into Telstra’s Mobile Network, powered by Next G^®, which is Australia’s largest mobile network, providing them with better indoor coverage and allowing them to use their devices in more places.”

John Banfield TNS’ General Manager, Asia Pacific, said:

“By leveraging the TNS online portal and network capabilities via Telstra’s Wireless M2M Control Centre, we have created a unique offering that will benefit all organizations that use wireless payment acceptance devices. The solution can service new and existing clients.”

“TNS is currently rolling out the wireless service, further increasing our double digit market share of wireless payment acceptance devices under management in Australia. Telstra’s network reach and resiliency, coupled with our commitment to bring value, improved performance and new capabilities to our customers, will enable us to meet the demands of increasing customer volumes, while maintaining the highest levels of service.”

Founded in 1990, TNS’ global expertise extends to more than 60 countries across Europe, the Americas and the Asia Pacific regions. Through its broader payment solutions offering, TNS now connects over a million merchants and retailers to the world’s leading banks, acquirers and processors, enabling secure, efficient and cost-effective delivery and processing of payments.

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