IBM and Visa team up to enable new Internet of Things business models with Watson


In the future, smart cars may not only gain the ability to navigate the roads without human input but also become independent enough to pay automatically after refueling at a gas station.

That’s the vision IBM Corp. and Visa Inc. laid out today during the opening event for Big Blue’s new $200 million Watson IoT Center in Munich. To make their plan a reality, the companies are launching a collaboration that will focus on developing a set of specialized payment processing services for the connected universe.

At the core of the effort is the Visa Token Service, a cloud-based offering that the credit card giant has developed to protect consumers’ financial information. The platform can assign every user a unique digital identifier that provides the ability to make purchases without exposing account details to the other party. As a result, the risk of misuse is reduced while hackers are left with fewer opportunities to intercept financial credentials.

IBM will make Visa’s payment processing capabilities available through its Watson IoT platform to let manufacturers embed the technology into their hardware. Since the computational heavy lifting is performed in the cloud, their joint offering will be accessible for practically any device with Internet access and an onboard processor.

A smartwatch startup, for instance, could use IBM and Visa’s services to quickly implement a mobile payment system such as Apple Pay without having to build everything from scratch. Moreover, the fact that financial information is handled by Visa under the hood removes the need to establish individual support agreements with merchants. That eliminates perhaps the biggest barrier to implementing payment processing capabilities in connected devices.

IBM and Visa envision a world where consumers can make payments from practically anywhere, whether it’s their car or a smart appliance. If their partnership achieves its goal, the companies could gain a lot of ground in their respective markets enabling an entirely set of new business models for the connected universe.

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