IoT and Payments: Current Market Landscape
Publication Date: November 2017
The Internet of Things (IoT) is growing rapidly—8.4 billion connected “things” are forecast to be in use in 2017. That number is expected to increase to 20.4 billion in 2020, and starting in 2017, the IoT market is projected to be worth more than $1 billion annually. “Things” range from thermostats to automobiles, are used by individuals and businesses, and enable use cases that only a few years ago seemed like fiction. Cars talk to each other, and your refrigerator can order groceries.
One major use case that is expanding to the IoT is payment. Payment is now possible using a phone, wearable, or home assistant and is spreading to virtual or augmented reality experiences and connected cars. However, as the number of connected things increases, the number of end points vulnerable to attack also increases. Recent high profile IoT attacks (such as the malware attack using Mirai) illustrate the vulnerability of certain IoT devices. While consumers demand the ability to make a payment wherever they are and with whatever device they are using, they also want the transaction to be frictionless and secure. This demand creates a challenge for merchants, issuers, and acquirers.
This white paper was developed by the Secure Technology Alliance to provide an overview of the current landscape for IoT payments. The paper discusses major environments and use cases for IoT payments, security threats to IoT payments, and considerations for implementing payments with IoT devices. The white paper focuses primarily on IoT device payments made using the traditional payment infrastructure (i.e., credit and debit). However, IoT payments are expected to expand beyond the traditional payment infrastructure, with additional discussion of the future of IoT planned for future projects.
About this White Paper
This white paper was developed by the Secure Technology Alliance IoT Security Council and Payments Council to provide a resource for the industry that outlines the current market landscape for implementing payments with IoT devices and provides guidance for developing IoT applications that will include payment.
Secure Technology Alliance Council members involved in the development of this white paper included: American Express; Cardtek; Consult Hyperion; CPI Card Group; Discover Financial Services; Entrust Datacard; G+D Mobile Security; Gemalto; IDEMIA; Ingenico; Initiative for Open Authentication (OATH); IQ Devices; Mastercard; Metropolitan Transportation Commission (MTC); NextgenID; NXP Semiconductors; Rambus; Underwriters Laboratories (UL); Visa.