As more devices can be used to make payments, ensuring a consistent and trusted user experience is essential. This post explores how the flexibility of the EMV® Specifications is supporting new use cases across IoT payments.
The Internet of Things (IoT) has the potential to transform and digitalise all aspects of our lives.
As the number of connected devices grows, consumers are getting used to paying in different ways. For example, the rise of ‘voice commerce’ is enabling to consumers to shop and pay for goods and services through their smart speaker. In-car payments have the potential to transform how cars are refilled or re-charged. Even household appliances such as fridges can now support payments to keep the shelves well-stocked.
With adoption building, the IoT payments market is predicted to be worth $27.6 billion by 2023 and continued growth is expected.[1] But as IoT payments grow in popularity, it is important that consumers and merchants can rely on a seamless and secure payment experience, whatever device is used.
In fact, EMVCo has already established dedicated hardware and software security evaluation processes to promote trust and confidence across the IoT payment ecosystem. And it is also committed to advancing EMV Specifications that are flexible to support emerging IoT payment use cases. Here are three ways that EMV Specifications are already supporting the growth of IoT payments:
1. Extending the benefits of EMV Chip
EMV Chip Specifications provide a blueprint for chip technology to work consistently anywhere in the world to deliver the same result – secure, seamless and reliable in-store payments. Though first developed for payment cards, EMV Chip is not limited to this use.
Today, EMV Chip is the bedrock technology for a portfolio of EMV Specifications enabling seamless and secure transactions across contact, contactless and mobile channels. The flexibility of the specifications is extending the benefits of EMV Chip beyond retail in-store payments to include IoT and in-car payments.
2. Enabling innovation with EMV Payment Tokenisation
EMV Payment Tokenisation enhances the underlying security of digital payments by limiting the risk typically associated with compromised, unauthorised or fraudulent use of primary account numbers (PANs).
As this technology limits potential risks from payment data being compromised, it promotes the development of new payment technology and scenarios where the risk of using a PAN would be deemed too high. Therefore, the EMV Payment Tokenisation Specification encourages innovation and the creation of new ways to pay, without compromising security, or adding cardholder friction.
3. Supporting new use cases with EMV 3-D Secure (EMV 3DS)
EMV 3DS is a fraud-prevention technology that enables consumers to authenticate themselves with their card issuer, without adding unnecessary friction to the payment process. EMVCo has updated the EMV 3DS Specifications to support more secure and convenient e-commerce authentication, with EMV 3DS Version 2.3 providing more implementation flexibility for a broader range of use cases. This makes it easier to implement EMV 3DS across emerging e-commerce payment channels and devices, such as smart speakers and other IoT devices.
[1] Worldline, The IoT Payment Revolution, August 2021
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EMVCo continues to evolve the EMV Chip Specifications in collaboration with merchants, issuers, acquirers, payment networks, financial institutions, manufacturers, technology providers and testing laboratories across the globe to support new ways to pay.
by Arman Aygen
by Sophie Rainford