Dive Brief:

• IBM and Visa have forged a partnership under which Internet of Things devices equipped with IBM's Watson artificial intelligence technology will be able to leverage Visa payments capabilities to enable billions of connected devices to participate in commerce applications.
• More than 6,000 companies that already have Watson-enabled IoT architectures in place can now integrate payments across their entire product lines using the Visa Token Service, a new security technology that replaces sensitive account information found on payment cards with a unique digital identifier, via IBM’s Watson IoT platform. As a result, IBM and Visa could support payments and commerce on many of the 20 billion connected devices estimated to be in the global economy by 2020.
• All of IBM’s future Watson IoT Platform customers also will have access to Visa payment services via the IBM Cloud from the start, helping customers to begin building personalized commerce experiences.

Dive Insight:

This is a case of a pair of giants in their respective sectors teaming up to attack a market opportunity that is way bigger than both of them. Just in the auto industry, there are expected to be about 380 million connected cars by 2021. Imagine many car models having automated payments capabilities — your car could pay for gas or order a video for your in-car entertainment system without you having to open your wallet.

And those are just speculative applications that would affect one industry. Knowing that this capability exists could radically influence what automakers decide to put in new vehicles, and even how aggressively they would push connected cars toward their market debuts, knowing that a new universe of potential commerce applications awaits.

Still, visions of connected car commerce may be at least a few years away from being realized. Meanwhile, the home appliance industry is one that could leverage this integration between IBM and Visa even more quickly. The vision of kitchens full of smart, connected devices is arguably already a reality: Companies like Amazon and LG are already working together to make commerce via smart appliances happen (although through voice-driven Alexa in their case.)

The pairing of IBM and Visa could make something similar a reality for appliance makers that don't want to get in bed with Amazon, and that may want to enable a refrigerator to be able to order needed groceries without even requiring its owner to say a thing. Continuing on that line of thinking, at a time when Alexa's potential reach seems unlimited (it's already going into cars, for example) perhaps a smart, payments-equipped IoT device can be proof that not everything needs Alexa (or Siri or Cortana, etc.)

As people have pointed out before, the IoT is not so much about the devices being connected, but the ability to use that connectivity to positively affect the customer experience. Embedding payment capability into IoT-linked cars, appliances, wearable and whatever else can go a long way toward doing that.