February 16, 2017
By John Stewart
A year ago, Visa Inc. expanded its Visa Ready program beyond mobile point-of-sale terminals to support tokenized payments on a wide variety of Internet-connected devices. On Thursday, the payments company took the next step in that plan, announcing a collaboration with IBM Corp. that will allow businesses to enable payments for “devices” ranging from automobiles to smart watches on a platform embedded with IBM’s Watson artificial-intelligence program.
The Watson Internet-of-Things platform already serves more than 6,000 IBM clients that are connecting their customers to “millions” of devices, according to IBM. With Visa in the picture, those customers will be able to pay according to usage or other measurable results either calculated for forecasted by IBM’s AI capability.
In one example cited by IBM and Visa, a driver could take a new car off the dealer’s lot and pay for it according to the mileage he racks up. Similarly, with alerts from the Watson platform, the driver could order a new fan belt or other replacements for worn-out parts, then schedule a service visit. Visa and IBM cite estimates indicating there will be 380 million connected cars by 2021.
In yet other examples, a runner using a fitness device equipped with a wireless running chip could be alerted by Watson when it’s time to replace her running shoes, then pay for the new shoes on the spot.
The collaboration between the two corporate giants means IBM clients will have cloud-based access to Visa’s token engine via their link to the Watson IoT platform. Tokenization masks actual card-account numbers with random strings of digits. The two companies stress the speed their collaboration will bring to businesses looking to add payments to IoT connections.
“Rather than approaching businesses on a one-by-one basis, IBM and Visa provide all customers with instant access to these capabilities so they can immediately begin to build personalized commerce experiences that take into account each consumer’s behaviors and proactively make recommendations based on their unique needs,” says a jointly issued press release.
Harriet Green, general manager for IBM Watson IoT, added in a statement: “This combination of IBM’s industry-leading IoT technologies with Visa payment services signifies the next defining moment in commerce by allowing payments on any connected object, with new levels of simplicity and convenience for everyone.”
IBM’s announcement with Visa is part of an IoT conference the computing giant is holding Thursday in Munich.
SPECIAL FEATURERead Digital Transactions Online