Internet of Things, or IoT, may be the most impactful concept, as well as the least understood, of the next ten years.
What is IoT?
The simplest—and perhaps the easiest—way to think about the Internet of Things is any machine-to-machine (M2M) communication through the internet. This includes your phone controlling your AC or starting your car, or anything considered “smart.”
But when people talk about “smart” machines, it’s not just devices sending signals between each other. In a Wired article from 2014, Daniel Burrus explained that it’s the sensor within the machine. Sensors gather data, evaluate it, and are then able to react. Let’s take a simple scenario that could benefit from sensors. Imagine a printer that senses when it’s running low on ink and automatically orders more. Or smart cement incorporated into a bridge that can sense when the structure is warping or cracking. Or traffic lights that are operated with sensors instead of timers to better control traffic.
The opportunities are seemingly endless, and they are only going to grow.
According to Business Insider’s yearly report on IoT, there are currently 6.6 billion IoT devices in use. By 2021, there will be 22.5 billion. Gartner, a tech analyst firm, projects 20.8 billion devices by 2020. No matter the report or how accurate the forecast will be, it’s clear that IoT will change the way we work and the way we live.
IoT’s Biggest Users
Interestingly, businesses, not consumers, will see the most change as they integrate IoT into operational procedures and products.
“Smart” devices gather tons of data that allow businesses to analyze buying cycles, trends, and consumer needs, making projections and product development more accurate and timely. You don’t have to be a tech company to capitalize on the world of cloud-based operations. IoT will affect agriculture, government, manufacturing, banking, and any industry that can benefit from being more connected and more informed.
We have smart phones, smart homes, and smart cars. We will eventually have smart cities and smart warehouses.
IoT and Payment Processing
No matter your industry, chances are you use some sort of point of sale (POS). And—yep, you guessed it—this industry is also jumping on the IoT bandwagon to make receiving payment faster, more secure, and more mobile so you make more money.
Many of us are used to a standing POS on a sales counter. Then devices like Square hit the stage, making the POS more mobile and agile. Now there’s the mobile wallet. The trend is swinging toward making purchasing and selling more fluid and instantaneous, without anything as “cumbersome” as cash or card.
To get a glimpse of the future, let’s take a look at Visa. Visa has partnered with Honda and IPS, which have parking meters across the US so that a driver can pay for parking from their dashboard. Visa has also partnered with Gilbarco Veeder-Root, a gas pump manufacturer so that drivers can do the same thing at a gas pump. While it may not be entirely necessary, this type of collaboration is cool and shows off the potential of IoT.
Remember the sensors in “smart” devices? Imagine them also built into a fridge that will order more milk when you’re out. Or a wearable that’s also a mobile wallet, so you don’t need to carry a card or cash. Essentially, anything can be turned into a POS, and anything can connect businesses to their consumers.
Huge strides are also being made on the backend—the hidden aspects of transferring money that people don’t see—and the goal is speed and efficiency. Just a few examples include:
- Chargeback prevention, not just resolution
- Payments security
- Invoice management
- Card information storage
Like the Visa example used above, more companies are looking at ways to integrate existing platforms, such as connecting your POS to your back office system, accounting system, security system, and even your scheduling calendar. The key to all of these devices becoming an IoT device is integration and collaboration.
Becoming a Tech Prepper
As a merchant and a business owner, what you do with this information is pretty simple and straightforward. Take a look at your current payments processing platform and ask yourself if it’s ready to handle mobile payments. Are there systems you would like to be better connected but aren’t?
The good news is you won’t necessarily need to overthrow everything you have to make it more IoT friendly. Big payments processors are working towards integrating all the systems you need to run your business efficiently. There are also several startups, usually programmers, who specialize in customization. Let’s face it; there’s no such thing as a one-size-fits-all program. Your business works because you have found a unique or custom need to fill with your customers. Your systems should and can reflect that same customization.
The better news is that while IoT devices are on the rise, there’s no need to buy what’s hot or popular. There is time to find what works before worrying about falling behind.