The growth of connected devices, better known today as the Internet of Things (IoT), is accelerating at an unbelievable rate. By 2020 there will be more than 50 billion connected devices (6.6 per person on the planet), up from just under 23 billion devices in 2016. The variety of devices and what they can do for us will become even more diverse. Probably the most important capability that these connected devices will deploy is making purchases on our behalf. This phenomenon of connected payment devices is quickly developing into the Internet of Payments, or IoP.

We are already seeing deployment of IoP enabled devices today from basic Amazon Dash Buttons to sophisticated Samsung washing machines that can order their own detergent when running low on supplies. While some of the devices (e.g., Amazon’s Alexa) will be actively instructed by humans, others will work in the background (e.g., a connected car ordering fuel to be delivered). In the near future, we will see driverless cars navigate themselves to the dealership for maintenance, pay for the service and return home. Powering payments for these connected devices will be digital payment networks such as credit cards or ACH.


”Payment networks will need to evolve and use their token services. As consumers add more devices that can make purchases, the payment infrastructure will need to evolve to keep up with the data and management capabilities necessary for IoP. Consumers and businesses will expect their payment provider to answer questions such as ‘Which device made a particular purchase?’” said Michael Moeser, Director of Payments at Javelin Strategy & Research.

Bottom Line:

  • Payment networks and providers will need to develop new capabilities for the management of IoP.
  • Act sooner rather than later.