Telecoms move beyond connectivity

From things to payment transactions

The Internet of Things (IoT) continues to explode. IoT devices, such as smartwatches and other wearables, connected devices throughout smart homes, and connected cars are spawning mind-boggling amounts of data that hold tremendous—but mostly unrealized—worth. Telecoms can seize this chance to evolve beyond connectivity and into technology companies that help industries unlock the value of IoT data.

How? By leading the creation of an Economy of Things, first described by the IBV in 2015. In this next-generation application of IoT technology, physical assets become participants in digital markets—expanding beyond contactless and cashless payments on smartphones to robust IoT payment platforms that power autonomous device-to-device transactions.

Telecom providers can pair their rich connectivity history with the convergence of new technologies such as Web 3.0 protocols, blockchain, 5G, automation, and decentralized identities to open the door to a new era of innovation. This includes expanding IoT payment platforms into AI-powered data-sharing marketplaces where companies become buyers and sellers of services and data, and devices do the work of identifying needs and completing transactions.

A perfect storm: Technologies matured in parallel to enable an Economy of Things where organizations can discover value in IoT data.

The Economy of Things benefits both businesses and the public. It enables better customer service, personalized amenities, and near frictionless payment experiences. Telecommunications companies and their cross-industry peers can pioneer partnerships that leverage IoT payment solutions and data-exchange marketplaces to realize radical new business models that monetize data for competitive advantage. These empowered new ecosystems will be positioned to better address current issues related to sustainability, smart cities, supply chain management, and more.

The IoT payment platform

The Economy of Things begins with a payment platform: one that is neutral, decentralized, and scalable, underpinned by an interoperable infrastructure, common standards, and a connective fabric of trusted data and services provided by a cross-industry ecosystem of partners. Key technology elements include:
 

• Blockchain technology: Provides a foundation that brings neutrality and decentralization—attributes that are important to gaining the trust of the companies joining the platform. A smart contract library enables various digital payment methods, such as token, peer-to-peer, banking, or credit card payments, when predetermined conditions are met.
• Decentralized digital identities: Uses decentralized identifiers (DIDs)—a unique identifier that represents a person or a device across the internet—to enable decentralized authentication. This helps create trust in data ownership and makes it possible to link permissioned data to that individual or the device, which can then be anonymized and shared with relevant, permitted parties in the ecosystem.
• Data fabric architecture: Integrates ecosystem participants’ data pipelines using data virtualization to connect to the different sources. Provides knowledge of where data originated, what it is, who can access it, and when it should be retired.

From IoT payment systems to data marketplaces

The marketplace component brings the Economy of Things to life. It connects the ecosystem with the technology and provides data brokerage services—designed to be secure and compliant—for those who own the data, process the data, and develop data-driven applications. Imagination is essentially the only limit to the use cases for monetizing data on such a platform.

Imagination is essentially the only limit to the use cases for monetizing data on an IoT payment and data exchange platform.

But the real promise—and the vision for the future—lies in using AI and machine learning to analyze real-time marketplace data and then empowering the devices to detect something of value and link the buyers and sellers to complete the transaction. For example, if fleet operators joined such a platform, a payment-enabled IoT device within one operator’s truck could identify and sell spare capacity through the marketplace to other operators or movers of cargo, efficiently expediting delivery of goods.

How could you capitalize on the opportunity of the Economy of Things? What customer experiences can you envision? Will you be a builder of the platform or the leader of cross-industry ecosystem initiatives? Download the report—co-authored by IBM, Vodafone, and GSMA industry leaders—to spark ideas for innovation.