Disappearing Payments On the Internet of Things


On the Internet of Things the world is the Web. Sensors do their sensing, objects talk to you (or your phone, or your glasses) and to each other.

But if a can of soup can (theoretically) know you’re buying it, then why do mobile payments feel like they’re stuck with a ‘last mile’ problem not dissimilar to the old days when high bandwidth Internet access was constrained by that last bit of cable that runs from the road to your living room?

At Banking4Tomorrow, Brett King proposes that you don’t solve the last mile by deploying sexy new digital wallets or interfaces. It’s making payments disappear almost entirely that’s key to mobile payment adoption – much like the value of the Internet of Things will be driven in large part by what we don’t see.

We’ve been focused for too long on complex application stacks built on a legacy of payment infrastructures and security concerns and global panels on eWallets, all of whom were trying to solve the ‘last mile’ problem by, in essence, arguing over what kind of cable to string from the road to the home. As King notes:

“The pattern emerging is that, like the hype cycle, there has been a complexity cycle with modern payments based on transmission and identity that we simply didn’t need with a cash based system. Banks and payments players learned to value complexity as protection from fraud and a barrier to entry, but today it is that complexity that now is getting targeted by technology like mobile.”

Giving Users Context and Experience

Mobile, start-ups and new technologies are in the process of dis-intermediating the payment industries by focusing on the user first:

“The ultimate expression of all of the technology we are seeing right now in the payments space is not to make payments sexy, it’s to make the payment disappear…Digital natives certainly expect more context in their life. The most simple form of context in a payment instance would simply be understanding how much money you have in your bank account before you make a purchase or payment. The way payments evolve from here will not be making payments faster or better. The payment will disappear, becoming an embedded instance in another engagement or interaction.”

And yet this context only becomes possible because of the underlying complexity not in spite of it. I’d argue that NFC, for example, has been the biggest barrier to the last mile: contactless payment technologies that were still like a moat you needed to cross from the street to the living room. NFC was a needless barrier to context-sensitive technologies where, even though it might be contactless, you might as well be making contact – your phone (or chip or card or whatever) needs to be too damn close to the so-called contactless node.

With the advent of Bluetooth LE and other technologies, we’re leaping towards a new standard. If this was as if  Bluetooth LE decided to skip the last mile entirely and just broadcast broadband from the street itself.

Simplicity from Complexity

Like almost everything with technology, however, King is right: the art is in making extremely complex things incredibly simple. Now that the tools are in the hands of someone other than banks and large legacy-driven institutions, the user experience on the Internet of Things is finally in the right hands.


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