Fintech Payments UX

Payments, the internet of things, and the end of civilisation as we know it

Payments, the internet of things, and the end of civilisation as we know it. Photo: Dean Drobot, Shutterstock.com
Written by Tom Hay

Tom Hay looks at useful examples of the internet of things (IoT) for payments, and there aren’t many.

The internet of things (IoT) is at the peak of the hype cycle, so it’s not surprising to find payment companies trying to jump aboard the gravy train. The problem is, consumers (that’s you and me) don’t seem keen to take that same ride. I think there are two reasons for this, one shallow and one profound. The shallow reason is that the examples offered so far range from implausible to laughable. Among the risible examples is Samsung’s Family Hub Refrigerator (I kid you not), which features a touchscreen on the door. Now, if there was a demand for this functionality, the obvious solution would be to superglue your iPad to your dumb fridge, but I’ve never heard of anyone doing this.

As for the payment functionality, apparently “the entire family can connect to your favourite local grocer to make a list and place an order” and pay by Mastercard. Now that sounds a bit like – oh yes, online shopping! Except you have to do it standing in front of the fridge instead of sitting on the sofa. Alright, I admit that was an easy target. Well what about sneakers – or running shoes, as people who actually run tend to call them. Visa has an idea of a chip in your shoe – a silicon chip, not a stone chip or a potato chip. (Actually, Nike had the idea 10 years ago, but let’s not let facts get in the way of a good story). As well as tracking your runs, “it reminds you that it’s time to buy new sneakers and securely places the order for you from your favourite retailer using your preferred Visa card” (of course).

Back in the day, I was a pretty keen runner, but I didn’t change my running shoes more than a couple of times a year max. Is automatic reorder and payment saving me significant time and effort? Is it worth including payment functionality that will be used literally once only in the lifetime of the item? Visa, if you’re listening, the correct answer to both questions is no.

How about the recent announcement from Jaguar and Shell that drivers can “use their car’s touchscreen to pay for fuel with a new cashless payment app”. At least this might get used on a regular basis. The question here is, given that the underlying payment method is PayPal or Apple Pay, why wouldn’t you just use your phone? Well apparently, “unlike current phone-based payment methods, Shell and Jaguar Land Rover have created a simple but secure customer experience that uses geolocation technology and a cloud-based pre-payment check”. Now, I know my phone has geolocation technology – I often use Google Maps to navigate to the petrol station – and I assume it could use a “cloud-based prepayment check” (whatever that might mean) just as well as a car. I’d say phones have a couple of other benefits: they work no matter which car I happen to be driving, and they cost considerably less than the £30,000 or so I’d pay for a new Jaguar!

Lousy use cases

So much for the shallow reason of lousy use cases. Let’s move on to the deeper reason, which is human psychology. The first issue to deal with is trust. Would you trust your fridge, sneakers, toothbrush or Barbie doll to make payments correctly and securely? The problem isn’t so much “computer says no” as “computer says yes – 1,000 times”, and suddenly a truckload of washing powder turns up on your doorstep. Even if we let hope triumph over experience and pretend that IoT payment software won’t have bugs, the recent massive internet outage caused by hacked IoT devices should make you wonder what might happen if all those devices were payments-enabled. An awful lot of us could wake up to find our bank accounts empty. I for one would want to scrutinise and approve each and every payment initiated by a $5 gizmo.

The second issue is more subtle, but ultimately far more important. The UK is a nation of online shoppers. It’s even more popular than social networking. Do people find this a chore that they’d like to avoid? Absolutely not – it’s an enjoyable pastime, a favoured leisure activity, and people get satisfaction from it.

Returning to the Visa running shoes example, choosing a new pair of running shoes is part of the fun of being a runner. Why do you think manufacturers bring out new models so frequently? Runners love discussing shoe weight, cushioning, support, offset and so on. Having a chip simply reorder the same model of shoe would leave them with nothing to talk about but the weather. Running as a pastime would literally die on its feet. And that’s the deadly danger in the idea of the payments-enabled IoT. Nowadays, people’s very identities depend on their role as as consumers: “what you buy is who you are“. Take away our responsibility for purchasing, and instead of being happy shoppers we become nothing but a source of funds for our IoT devices. We will decline into a nation of anonymous zombies, staring glassy-eyed at the latest box set recommended by a bot, and purchased automatically by our payment-enabled set-top boxes.

We will become slaves to our possessions, earning money for them to squander. I have nightmares about being nagged by my dishwasher to increase its pocket money.

So I appeal to you all, keep payments away from the internet of things. Today, it looks like nothing more than a stupid and pointless idea, but if it catches on it will mean the end of civilisation as we know it!

READ NEXT: Who owns the customer in the Internet of Things?

Photo: Dean Drobot, Shutterstock.com

About the author

Tom Hay

Tom Hay is head of payments at Icon Solutions, and an IT architect specialising in large-scale, real-time payment systems. He has deep experience with financial institutions moving to next-generation payment systems. He draws on two decades of payments experience as head of architecture with one of Europe's largest clearing houses, and as CTO of a successful VC-backed company selling real-time payments products to international markets.

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