Connected devices and the future of payments
More than 80 percent of Americans have a strong interest in using connected devices to make purchases, with a keen eye toward security and data concerns, according to Visa and Pymnts.
More spending, across more devices, in less time
As the use of voice-controlled assistants and wearable devices become more commonplace, consumers are citing adoption benefits such as saving time, more frictionless payments, and efficiency with day-to-day tasks. With benefits such as these, it is no wonder that the number of connected devices has increased to 4.4 devices per person on average in the age of the IoT.
The study found that 75 percent of consumers have at least one connected device, in addition to their smartphones, computers or tablets. 83 percent recognize those devices as saving time and reducing friction when making purchases – subsequently creating an unattended checkout experience, regardless of device or platform. This seamless purchase experience is of interest to all respondents, with auto-pay at the pump and in-store topping the list at 40 percent.
Connected device ownership is an increasing trend. The average consumer owns 4.4 connected devices including game consoles (47 percent), activity trackers (41 percent), smartwatches (15 percent), voice-controlled assistants (14 percent), connected thermostats (9 percent) and virtual reality headsets (7 percent).
Consumers with more connected devices make more purchases. Additionally, connected consumers makes more purchases across more product categories than those with just one connected device, with apparel and footwear leading the way.
Buying things, using a connected device is widespread. In 11 out of 19 product categories ranging from healthcare to accessories to food, 50 percent or more of the consumers studied made online purchases through a device within a week of the study. Top three categories included travel services, household repair and entertainment.
Banks and payment networks help ease trust and security concerns
The study also showed that as speed and convenience continue to drive adoption of connected devices, consumers still place high value on trust and security. Importantly, the more connected a consumer is the greater their concern is about their financial safety. When asked, more than 75 percent of respondents cited ‘data privacy,’ while 69 percent cited ‘order verification and accuracy.’
Respondents also place a greater trust in banks and networks to enable payment via connected devices. Over 65 percent cited card issuers and bankcard networks as the institutions they trust most to enable those experiences, over retail channels, social networks and mobile device manufacturers.
“The category of payment-enabled devices is still in very early days, yet this research shows just how much consumer interest and understanding is starting to build for what these experiences can offer,” said Jim McCarthy, executive vice president, innovation and strategic partnerships, Visa Inc. “As we work with our banking partners to make it easier to put payment credentials onto devices, a few new consumer use cases will inevitably breakthrough and start to really change the game.”