IBM and Visa join forces to turn billions of connected devices into points of sale

IBM and Visa Inc. today announced the industry’s first collaboration that brings the point of sale everywhere Visa is accepted, by allowing businesses to quickly introduce secure payment experiences for any device connected to the Internet of Things (IoT).

The collaboration brings together IBM’s Watson IoT platform and cognitive capabilities, with Visa’s global payments services that are used by more than 3 billion consumers globally. IBM’s Watson IoT Platform allows businesses to connect to billions of connected devices, sensors and systems around the world and then draw actionable insights. Today the platform is used by more than 6,000 IBM clients that are helping customers connect to millions of devices.

To push their shared „vision” of embedding payments into any device, the partners will offer IBM Watson IoT clients the chance to tap the Visa Token Service, which replaces sensitive payment account information found on cards with a unique digital identifier.This could see payments and commerce supported on a huge chunk of the 20 billion connected devices estimated to be in the global economy by 2020.

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How it Works:

In the future with this collaboration, all of IBM’s Watson IoT Platform customers will have access to Visa payment services via the IBM Cloud. As a result, rather than approaching businesses on a one-by-one basis, IBM and Visa will provide all customers with access to these capabilities, so they can begin to build personalized commerce experiences and proactively make recommendations based on consumers’ unique needs.

As part of this collaboration, the companies will also ensure that all consumer information remains secure by leveraging Visa’s Token Service, which replaces sensitive account information found on payment cards, such as the 16-digit account number, expiration date and security code, with a unique digital identifier that can be used to process payments without exposing actual account details. The Visa Token Service is accessible through a network of token service providers (TSPs) as part of the Visa Ready partnership program, which certifies the next generation of third-party payment solutions to ensure they meet Visa’s security standards and specifications, and will have seamless and secure global acceptance.

Examples of Commerce-based IoT:

Consider the consumer’s car. Experts estimate there will be 380 million connected cars by 2021. As the car ecosystem connects to the Watson IoT Platform, a driver would be alerted when the car’s warranty or certification is about to expire or if specific car parts need replacing. With this information, the driver can order parts with the push of a button, or schedule a service appointment at their preferred local garage. The driver could even pay for gas through a direct interaction between the car and the gas pump.

This week, Jaguar unveiled technology that means owners can use their car’s touchscreen to pay for fuel at Shell service stations in the UK using PayPal or Apple Pay.

Similarly, with a fitness device, an avid runner with a wireless running chip, could receive a digital alert when it’s time to replace her running shoes, including a recommendation of the best model, at the best price, from a preferred retailer. Additional relevant and tailored recommendations could be offered, including nutrition and equipment recommendations, based on individual performance, local climates and shopping preferences.