The future of payments is here, and it’s called the Internet of Things. Customers can use their smartphones to make purchases anywhere in the world. And because the technology is still in its early stages, there are very few restrictions on how businesses can use it. For example, a restaurant could allow customers to order and pay for their food using a mobile app. Or a retail store could let customers pay for goods with a simple wave of their phone. The possibilities are endless. And as the technology continues to evolve, we can expect even more innovations.
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Data for today’s episode is provided by Mercator Advisory Group’s report – IoT Payments: Taxonomy Driven Market Size and Company Rankings
A Three Step Definition, and Leading Industries
IoT Payments Definition:
- “A machine triggered payment with real-time analytics and data collection.”
- An IoT payment is a real-time data-driven payment that does not involve the buyer making a purchase decision.
- Instead, the buyer has previously authorized a plan for payments made automatically based on feedback from a sensor or automated data source.
IoT Payments Leading Industries:
- The leading industry in 2019 was automotive, electrical engine, and diagnostic equipment manufacturing, with an estimated $3.9 billion in transactions.
- The second largest industry in 2019 was printers, computers, and manufacturing, with $1.24 billion in transactions.
- Toothbrushes, electric, and manufacturing captured the third largest industry, with $585 million in 2019 transactions.
About Report
IoT payments continue to drive increased revenue. Mercator research indicates IoT payments are growing up to 15% YoY and are part of strategic plans for Fortune 500 companies, some of whom indicate in annual reports that they expect IoT to disrupt existing markets.
Mercator Advisory Group’s latest research report, IoT Payments: Taxonomy Driven Market Size and Company Rankings, delivers taxonomy driven market research that provides market size by year, company, origination product, NAICS code, and as a percent of company revenue. The taxonomy utilized will enable Mercator to conduct industry specific competitive research projects and will dovetail that research with all other research performed using the NAICS database.
“Fortune 500 company innovation and growth strategy plans involve IoT payments. Companies see initiatives involving IoT payments as a way to differentiate and grow new business. Of the companies and IoT payments examined, IoT payments grew at an estimated 7% (2018-2019),” comments David Nelyubin, Research Analyst at Mercator Advisory Group and one of the authors of the report.
Although IoT payments are still in the early stages of adoption, they are already generating significant transaction volume across a variety of industries. As connected devices become more intelligent and autonomous, IoT payments are expected to play a larger role in automating routine transactions and improving operational efficiency. With strong growth projections and increasing interest from major enterprises, IoT payments are poised to become an important component of the evolving digital commerce ecosystem.
