Corporate Strategy Leader
Decades ago, only a few people could have imagined how technology would become ingrained in our everyday lives. Advancements in AI gave way to the second wave, focusing on data – the perception, the abstraction, and machine learning. As most millennials grew up with digital devices, the expectations of how technology could and should work expanded with each subsequent generation. The expectations of Gen Z and Gen Alpha helped bring about the third wave, where technology gained context. The development of responsible AI, and its ability to provide the rationale for decisions, brought contextual AI (CAI) into the equation, making machines human-centric. Both became a driving force powering the IoTs to become the IoRTs – the Internet of Robotic Things.
IoRTs can, in fact, power anything. Combine the ability to power anything with technological advancements, rising customer expectations where multiple applications are an inconvenience, and connected devices, and we’ve created a need to build holistic digital ecosystems that require minimal human intervention. With digital wallets, blockchain, and 5G connectivity, an intelligent payment ecosystem is the perfect use case. By developing an anything-that-pays model, we're producing a new, integrated way of connecting things to make autonomous payments that seamlessly fits into our lives.
Let’s visualize how new age technologies can change the way we do various day-to-day transactions.
Jack works in downtown Minnesota but lives in the suburbs. Every day, he drives back home and spends at least an hour in slow-moving traffic. At least twice a week he makes a pitstop to buy groceries at his favorite store.
Here’s where anything-that-pays capabilities come in. Jack has his own agent that will activate the voice assistant, like Alexa, in his car. The agent asks him if he wants to make his usual grocery order. He responds “No” and communicates his new list of items – then the system automatically contacts the store, places the order, and makes the payment. Jack does the drive-through grocery pick-up and then gets right back on the highway! Shortly after, he stops at the nearest charging station. The tech-enabled charging station recognizes his vehicle through a camera (license plate recognition) or using RFID and makes a payment request. Jack’s car receives the payment request and notifies the in-car app. The agent asks Jack to confirm the payment and performs a 2-factor authentication using HMI (touch screen) or voice recognition. After confirmation, the payment is made.
This is made possible because the agent is connected to the in-car solution installed on his onboard device (OBD). The device is linked with a blockchain currency wallet hosted on the on-board device or a portable (handheld) computing device. The wallet initiates the relevant blockchain protocol and completes the transaction with the chosen currency. Ultimately, that’s how the charges made to the grocery store and the charging station get settled.
Now Jack’s back at home, watching TV, spending quality time with his family. Without any intervention, the agent is monitoring the machines in his house. Let’s take his washing machine, for example, which is running low on detergent. The agent uses the IoT sensors and edge devices attached with the washing machine. It computes the future need for detergent based on the wash cycles completed and has access to Jack’s blockchain currency wallet, which is preauthorized to complete regular transactions for small amounts. The agent orders the detergent without a need for Jack’s approval. If his washing machine requires maintenance, it will raise an alert via the sensors and edge device. That alert gets sent to the agent, which then asks Jack to confirm the request as it strays from the normal transactions. Once confirmation is received, the agent will book a service call with the relevant technician.
As with the maintenance example, Jack’s intervention is only required if the cost goes beyond the predetermined threshold amount or any regularly scheduled bills. For these transactions, the agent sends a voice notification requesting his authorization. After a quick confirmation, the transaction continues as normal.
How would the agent handle subscription-based devices? Seamlessly! Whether there’s a monthly cable bill, streaming services, magazine, or website memberships, the agent will renew these automatically and complete the monthly payments without any intervention. Even gaming applications and in-app purchases will be preauthorized.
The agent acts as Jack’s financial assistant by managing the finances and providing updates when he’d like to review. The best part of having an anything-that-pays agent is that, based on your predetermined setup, the agent requires minimal human intervention as specified and will only request a confirmation when needed. The agent also studies the spending patterns and value-based usage to find more economical alternatives. To start, changes in subscription plans will require Jack’s go-ahead. But as the agent gains Jack’s trust, it may even discontinue certain services, while augmenting others, or at times, combine services for an entirely new option as a straight-through process.
Intelligent and connected payment system
Order and buy groceries through voice recognition and onboard system
Initiate and automate parking payment through car’s onboard system
Automate vehicle recognition and toll payment process
Enable station to capture vehicle’s history, needs, issues automatically
Automate vehicle recognition and payment process
Automate vehicle selection and payment
Control home appliances, reordering, security, entertainment, heating/AC, and more
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Initial online payment
An online CD is sold by an entrepreneur through a credit card; Coca-Cola vending machines accept payments through text messages
Elon Musk and Peter Thiel introduce digital money transfer service, PayPal
M-PESA creates first mobile payment system
Bitcoin launches, introducing secure, untraceable payments using decentralized payment system
WeChat Pay in 2013, ApplePay in 2014, GooglePay, AmazonPay, and others were introduced later
Blockchain-based currencies like Diem may gain traction due to structure that uses the transparency of blockchain, but also has a governing body
Evolving customer preferences are changing the way brands do business and with that, the payments landscape. Currently, 74% of Gen-Z spend their free time online, and the same group expects a frictionless purchase experience. Forbes contributor, Shep Hyken, notes in his article, The Influence of Gen Z, that ”one extra step at checkout will cause them to turn to the competition.” Combined with Gen Alpha’s increased focus on UX development, “AI and voice will become increasingly common methods of communication between human and machine,” observes Wired’s Victoria Kurk. Gone are the days when internet banking, wallets, and online shopping were a novelty; people now feel it’s overkill to deal with different apps for the same kind of task. Voice-bots like Siri, Alexa, and Google Assistant make consumer actions more seamless through one-touchpoint interaction and verification.
In addition to customer preferences, technological advancements have paved the way for businesses to transform the way they meet customer expectations. Additional third-wave enablers like 5G making an aggressive entry in the market is setting the foundation to further empower edge computing devices while greatly reducing latency. The rise of decentralized transaction ledgers, like blockchain, is another vital development that’s being established, used for financial transfers, and evolving into efficient document workflow management.
Digital wallets are one of the most essential elements enabling the whole autonomous payment process and helping make anything-that-pays a reality. This may pave the way for using similar blockchain-based wallets for other connected devices as well. Moreover, the adoption may increase with the advent of permissioned blockchain-based currencies such as the Facebook-backed Diem, that promises to be a more controlled version of cryptocurrencies.
The recent pilot launch of Novi digital wallet (a digital wallet for cryptocurrencies), followed by Facebook’s rebranding as Meta, will only accelerate the launch of Diem.
Further validating these opportunities and pushing them towards realization is the fact that technological standards for devices and their relevant protocols have already been defined by IEEE and other standards organizations – be it the latest Bluetooth 802.15, the design of IoRT sensors themselves, or the Fog network protocols, it’s all there. All these factors, including increased connectivity, decentralization, and the addition of context-driven AI, have gained the trust of consumers and ushered in the future of connected devices with autonomous payment capabilities.
Customers have great expectations of what technology can do for them and are always looking for a seamless experience. By creating an intelligent network of things capable of autonomous transactions with reduced human intervention, we are using technology to give people more time and reducing some of their daily stress. An autonomous payment agent can manage each person’s finances and make transactions as simple as answering “yes.” Now’s the time for companies of all sizes to determine how they fit into an anything-that-pays model – if you don’t start now, you risk being left behind.
Vikram Israni is a seasoned corporate strategy leader with over 13 years of experience in corporate strategy, business consulting, and market research. He is currently working as Head of Strategic Research Group, a team that drives large strategy and market intelligence initiatives at Virtusa. Vikram is an analyst at heart with the vision of a business leader.
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