Commentary

Visa And IBM's Watson Look To Transform Payments On IoT

Another transactional ritual of the 21st Century that may soon go the way of the checkbook: it’s freezing cold as your hands fumble to get a grip on the credit card, which you insert into the slot on the gas pump upside down then, after correcting, your gloved finger punches in the wrong verifying zip code only to be informed that ….

IBM and Visa announced yesterday that they are working on ways for the artificial intelligence technology known as Watson to allow any device connected to the Internet of Things — such as your automobile — to not only cough over the amount due but also let you know, for example, when it’s time to buy a new part for it or replace it completely.

“IBM and Visa announced the collaboration Thursday at an event in Munich, Germany, where IBM is opening up a $200 million Watson Internet of Things headquarters. Via the partnership, the companies say they can support payments and commerce on virtually any of the 20 billion connected devices that Gartner estimates to be part of the global economy by 2020,” reports Edward C. Baig for USA Today

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The two companies are “bringing together the business of the Internet of Things combined with the technology of the Internet of Things,” according to Harriet Green, general manager of Watson Internet of Things, Commerce and Education in a promotional video

“As devices begin to get more and more connected, the point of sale is everywhere,” exclaims Avin Arumugam, SVP, Internet of Things, Visa, right after her. “And that is what we are so excited about.”

“‘What we’ve seen over the last 12 months is serious companies committing serious business to IoT,’ says Brett Greenstein, VP for IBM Watson IoT. ‘IoT devices now have the intelligence and connectivity to become extensions of company’s businesses. That’s really what wakes up an opportunity like Visa,’” Baig reports.

“We share a vision of commerce-based IoT where any device, from a watch, ring, an appliance, or car, can be used to make a purchase. Our goal is to enable commerce on any connected device anywhere,” IBM’s Green said at a press conference, Khari Johnson writes for Venture Beat.

Payments will rely on the Visa Token Service, a digital identifier for payment processing that first debuted in 2014. Apple Pay, Samsung Pay, and Android Pay were version one of these tokens. The IBM Watson IoT platform will help Visa scale to the 20 billion wearable and connected devices expected by 2020,” Johnson reports.

“The partnership also is an attempt to change the way consumers purchase big-ticket items. One futuristic hope: instead of leasing, consumers drive cars off dealers’ lots and payments will be triggered based on the miles they drive,” writes AnnaMaria Andriotis for the Wall Street Journal.

“Visa has just come off a strong quarter in which it posted large year-over-year increases in payment volume, total processed transactions and cross-border volume growth. But the company has to keep investing in technology where it is aiming to make payments ‘frictionless’ to increase the ways consumers can get onto Visa’s rails,” says finance chief Vasant Prabhu, Andriotis reports.

Meanwhile, “IBM also announced plans to offer the Big Data machine learning capabilities of Watson to users in the private cloud. IBM said that it will offer Watson to customers of its IBM z Systems mainframe — which it says will speed up analytical tasks for very complex models (such as the modeling the impact of health care cost changes or climate change),” writes Geof Wheelwright for GeekWire.

“The company claims that IBM z Systems mainframe is already capable of “processing up to 2.5 billion transactions — the equivalent of roughly 100 Cyber Mondays — in a single day.”

Good news for Amazon, where every day is Cyber Monday.

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