Advancements in wireless network technology, software, and hardware have combined to create mobile software embedded hardware- in other words the Internet of Things (IoT). Connected devices are set to continue to enhance and automate everyday tasks. According to an article written in TechnIExpert:
“ the year 2020 will be a milestone year for the payment industry. Be it cross-border payments or B2B (Business to Business) payments, a lot of companies will implement online payment methods as the BFSI sector will take the lead.”
Part of the BFSI sector, the insurance industry, has already taken charge in deploying IoT devices into consumer cars. These devices collect all possible data points from a vehicle in order to assess driving habits, generate a risk score, and ultimately come up with an insurance premium.
One of the key advantages is that it allows consumers to change their driving behavior if the telematics device notices above average risky driving habits. It is estimated that 14% of total dollar insurance premiums come from devices like these.
Although the BFSI sector definitely has a role in IoT payments, the industrial and manufacturing sector is also one to take note of. Process automation is crucial, and it is only a matter of time before payment for broken down parts, nearby supplier search, and time to delivery is all calculated and automated by IoT devices.
Overview by David Nelyubin, Research Analyst at Mercator Advisory Group