From touchless digital payments experiences to connected vehicles, technology provides opportunities for innovation and collaboration across many industries, including payments.
Connected devices offer consumers the ability to quickly adopt digital payments. For instance, during the pandemic, consumer behavior started to shift the expectation of integrated experiences.
Julius Alexander III, head of emerging payments at Discover® Global Network, discussed with PYMNTS how connected devices and cross-collaboration within various industries are redefining the commerce landscape.
The idea of integrating payments into connected devices is not entirely new. One early example of this integration is open tolling systems, Alexander said. For many years now, commuters have had the ability to drive through an unattended reader that communicates with a transponder in their vehicles. Tolls are collected with funds in a wallet, via license plate recognition and more.
This early innovation not only streamlined the payment process for consumers but also provided valuable data for tolling authorities, helping to improve infrastructure and reduce costs. Such collaborations demonstrate how connected commerce can build upon existing solutions to create new revenue streams and enhance user experiences.
“There are many shifts that have to happen to provide a frictionless and efficient experience for consumers as new technologies mature,” Alexander said, adding that as the digital landscape develops, companies must adapt to new consumer behaviors by embracing emerging payment advancements. Examples of growth are showing up in categories such as connected cars, smart cities, smart appliances and connected healthcare, to name a few.
“For payments, that means that we must be at the forefront on figuring out how we can improve people’s lives,” Alexander said. “And what we’re finding is that collaboration is key to our success.”
Alexander said he anticipates that the marketplace will be reshaped by the rise of more extensive collaborations, as well as a greater focus on ensuring that new technologies are interoperable and provide a consistent user experience.
Within connected commerce, this involves integrating various payment methods and platforms, which allows the ability for two devices to communicate with each other with limited to no consumer engagement.
The automotive industry provides an example of this integration, with vehicles incorporating payments into their infotainment systems, offering a seamless and convenient experience for drivers, Alexander said. A few examples to order and pay for services are QSR, order ahead, and electric vehicle charging and fueling. But there are many others. In grocery shopping, consumers can walk into some stores and pick items off the shelves, and then biometrics is used for authentication to initiate a payment. These examples give indications of what is to come.
“This showcases the potential of integrating payment solutions into everyday consumer activities,” he said, emphasizing the importance of working with a broad ecosystem of players, such as manufacturers, payment facilitators and specialized verticals, to create a unified and seamless experience for consumers. By defining new payment experiences, consumers get back their most valuable asset: time.
Connected commerce aims to address several challenges, especially around data security, convenience, physical safety and flexibility.
The ability to collect and analyze data from various sources, such as connected vehicles and IoT devices, enables companies to create personalized payment solutions by using features like automated reordering of groceries or personalized recommendations based on past purchases, he said.
“[We will] continue to see connected commerce … [build] on to the core foundation of these solutions, as well as integrate payments and expand into new areas,” Alexander said.
Discover Global Network envisions a future where payments are seamlessly integrated into consumers’ lives, he said, emphasizing the importance of equity and inclusion and noting that the unbanked and underbanked populations must be considered. This includes creating accessible and user-friendly payment methods for individuals regardless of their financial status or technological proficiency.
“In the past, I think in payments, we often had a desire to focus on the acquirers and the processors and the merchants,” he said. “Now, we [are focused on inclusivity] because innovation [for everyone] is what wins in the end.”
Looking ahead, Alexander said by prioritizing interoperability, data integration and inclusivity, the industry can ensure that connected commerce meets the needs of all consumers and drives the next wave of digital transformation.
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