IoT Payments: How the Internet of Things Is Influencing Payments


IoT payments, a payment mode further automating and digitizing the consumer purchase cycle

Mercator Advisory Group releases new research defining IoT payments and analyzing the impact the internet of things is having on the payments landscape.

Author: Tim Sloane
Published on: January 27, 2020

The “internet of things,” shaped from advancements in technology, has resulted in an exponential rate of devices (things) connecting to the internet. This expansion of connections and data collection enables more processing powered by artificial intelligence to augment our daily decisions and abilities. Both consumers and merchants are capitalizing on this technology, with the strategic applications changing the way consumers and merchants transact.

Mercator Advisory Group’s latest research report, IoT Payments: How the Internet of Things Is Influencing Payments, provides a foundational framework for categorizing payments by bridging payments and technology to define and analyze four basic payment modes: in-person, online, recurring, and IoT payments.

“Consumers and merchants are rapidly adopting technology and utilizing the IoT, further digitizing their relationship. Prior to Mercator Advisory Group’s research on the topic, there was no concrete definition of the concept “IoT payment,” and thus it was impossible to analyze this complex market segment. In constructing a payments categorization framework that bridges technology and payments, it became clear to Mercator Advisory Group that payments are becoming increasingly online and recurring and moving in the automated data-driven direction of the internet of things, comments David Nelyubin, Research Analyst, Emerging Technologies at Mercator Advisory Group and author of the report.

This report has 21 pages and 8 exhibits.

Companies and other organizations mentioned in this report include: Amazon, Apple, Canon, Domino’s Pizza, Epson, HP, Intel, Microsoft, MIT, Netflix, Papa John’s, Procter & Gamble, Progressive, U.S. Department of Commerce, U.S. Department of Energy, U.S. Energy Information Administration, Wall Street Journal, Walmart, and Whole Foods.

Highlights of the report include:

  • Discussion of the movement of consumers and merchants toward internet of things (IoT) connected payments
  • Analysis of payment modes and infrastructure, separating IoT devices from IoT payments
  • Analysis of a basic purchase process and presentation of a new model, the Mercator Payments Categorization Framework.
  • Definitions of the four payment modes or categories: in-person, online, recurring, and IoT payments)
  • Discussion of infrastructure, agents, full process map of an IoT transaction, and a comparison of the different payment modes.
  • Current market segments segmented by the four payment modes — in-person, online, recurring and IoT — with a focus on IoT payments.
  • Discussion of trends and future implications of IoT payments and the agents that are affected.



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