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Monday, May 15, 2017

Amex buys into voice payments

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Voice Payments Features Used

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American Express will allow Echo device owners to verbally inquire about account balances and pay bills, thanks to an integration with Alexa, Amazon’s virtual assistant, reports VentureBeat.

American Express is the second financial services company to create a “skill” for Amazon’s assistant, following Capital One’s early support in March 2016.

Although two other banks support the ability to pay bills using voice, USAA and Ally, those institutions use voice assistants housed in mobile banking apps, not smart home devices like Amazon Echo or Google Home.

By moving early into voice, American Express stands to gain valuable advantages. Here’s why:

  • Low adoption of voice for money movement gives first movers breathing room. Today, only 2% of respondents in BI Intelligence’s April 2017 survey had used their voice to pay bills, and only 1% transferred money to a friend, through any type of device. With few consumers adopting the feature today, providers have a low-stakes playing field to experiment with the technology — if they see its long-term potential.
  • Breathing room allows them to work out major experiential kinks. Because nobody has achieved adoption, there isn’t a consensus on the best approach to voice transfer or bill payment experiences. For example, Capital One allows users to opt in or out of using a verbal PIN for spoken transactions. American Express, on the other hand, requires users to speak a PIN for any transaction. With few users, both banks can afford to try these different approaches, fail fast, and iterate, thereby gaining a head start on their competition.

The long-term opportunity of voice is big. Over the coming years, voice payments will evolve from clunky and poorly scripted sessions to interactions as natural as one might have with a personal shopper or bank employee, bolstering adoption. The companies that perfect these experiences early will reap major benefits, such as lower cost of servicing, higher payments volume, and increased loyalty.

The rapid expansion of the Internet of Things (IoT) offers payments companies an opportunity to expand beyond mobile phones, cards, and point-of-sale devices, to a broad and diverse ecosystem of internet-connected devices.

We forecast that there will be 24 billion connected devices installed globally by 2020, up from nearly 7 billion today. And over 5 billion will be consumer connected devices by 2020, representing a massive expansion of touchpoints that could eventually offer payments functionality.

BI Intelligence, Business Insider’s premium research service, has compiled a detailed report that dives into the budding industry of connected device payments, providing a rundown of the stakeholders driving innovation in wearables, connected cars, and connected home devices. It also gauges the impact of new payment devices on different payments companies, along with how these devices could shift consumer purchasing behavior.

Here are some of the key takeaways from the report:

  • The Internet of Things is ushering in a new era for payments companies and manufacturers. The rapid expansion of the Internet of Things (IoT) offers an opportunity to facilitate payments beyond mobile phones, cards, and point-of-sale terminals, on a broad and diverse ecosystem of internet-connected devices. 
  • More transactions could eventually pass through connected devices than smartphones. We estimate there will be 24 billion of these devices by 2020, with 5 billion of them being consumer-facing. This represents a massive expansion of touchpoints where payments could be enabled.
  • Card networks have developed a basic framework to enable commerce in everyday devices. Visa and MasterCard are creating the underlying infrastructure to support the standardization of payments integration and stake themselves out as the key connected payments gatekeepers. Their payment platforms are universal, allowing digital payments to grow without being tied to the success of a particular manufacturer.
  • Consumer-facing IoT companies have much to gain from enabling payments in their devices, including improving the value of the device, being able to cross-sell products through the device, and laying the groundwork for future opportunities to earn incremental revenue. For payments companies, connected payments offer a new revenue stream and an opportunity to gain market share ahead of competitors.
  • Wearables, connected cars, and smart home devices will be the top connected payments product categories.

In full, the report:

  • Frames the opportunity for embedding commerce capabilities in new devices.
  • Explains how a device becomes commerce-enabled.
  • Discusses the potential for payment-enabled wearables, connected cars, and smart home devices.
  • Examines the impact of connected payments on key stakeholders.

To get your copy of this invaluable guide, choose one of these options:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> START A MEMBERSHIP
  2. Purchase & download the full report from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of connected device payments.

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May 15, 2017 at 10:11PM

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from Dan Van Dyke

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