February 20, 2017
Visa and IBM are partnering to make electronic payments easier in the emerging Internet of Things era. The two companies envision a commerce-based IoT ecosystem that extends digital payment capabilities to smart devices, including vehicles, wearables, and appliances. Drivers, for example, could pay for gas, parking, or oil changes before stepping out of their connected cars. Watson’s IoT platform would handle the AI tech, while mobile payment solution Visa Token Service would address digital transactions.
The partnership is an opportunity for Visa to expand the Visa Token Service, a digital identifier that makes electronic payments possible. VentureBeat reports, “The IBM Watson IoT platform will help Visa scale to the 20 billion wearable and connected devices expected by 2020.”
This is not the first time that Visa has tried to bring the service to vehicles. The company partnered with Honda to debut a smart car with built-in payment technology at CES this year. Jaguar and Shell have also combined forces to make in-car gas purchases a reality.
Watson general manager Chris O’Connor said that digital payments will make it possible for physical service providers to rent their devices as services, instead of simply selling them.
“When we think about the future of IoT, certainly from a connected perspective, we have an opportunity to extend our platform into all sorts of devices where the historic card and terminal just doesn’t work,” said Visa EVP Jim McCarthy.
According to VentureBeat, “Payments of this kind will require not just innovation from IBM and Visa, but what McCarthy called ‘the building of an ecosystem’ by both governments and businesses to ensure that stores and the parking meter on the sidewalk are equipped to handle payments.”
IBM is exploring additional opportunities with smart devices at its recently opened Internet of Things headquarters in Munich, Germany.