Connected Commerce:How Accenture Is Helping Companies Enable Commerce in an IoT World

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The Internet of Things is on the rise, with massive growth anticipated in both the number of connected devices in use and the opportunities to make money through connected solutions. Accenture can help companies capitalize on those opportunities. We work with organizations to build the capabilities needed to conduct commerce via connected devices—with a keen focus on those that enable the seamless, secure and real-time processing of digital data and transactions.

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The Rising Tide—and Value—of the IoT Market

Once merely a much-hyped buzzword, the Internet of Things (IoT) is now a powerful and growing economic force. By 2020, there will be more than 50 billion connected devices in use around the world,1 all converging to create huge new markets. In the next several years, revenues are expected to reach many billions of dollars in each sector including the industrial internet, connected home solutions, connected car services and connected health.

Key to making those revenues a reality is enabling emerging payment capabilities to create and facilitate financial transactions—what we’re calling connected commerce for IoT technologies. The Walt Disney Company, for instance, gives park visitors wristbands that facilitate contactless transactions in addition to granting access to resorts, hotel rooms, and rides.2 Leading manufacturers are looking in earnest at commerce transactions conducted by smart appliances to add value for customers—such as fridges that can order and pay for milk when stocks are getting low. Another example is Visa and Accenture working together to develop a connected car pilot for ordering food while on-the-go to test how in-car purchases can increase sales and streamline customer pick-up of orders.3

Accenture works closely with many other companies around the world to help them generate the most value from IoT. Accenture’s connected commerce experts help design and facilitate value-exchange processes within IoT to:

• Uncover innovative new ways to use IoT to enable and help increase transactions and revenue

• Streamline payment processing to help reduce transaction costs and increase settlement speed

• Secure sensitive consumer information in connected transactions

• Create highly personalized and contextual digital payment experiences

• Monetize the additional data generated by connected devices

Three areas of Accenture focus are especially important to enable financial transactions involving connected devices:

1. Block chain and cryptoprocessing,

2. IoT payment and data security,

3. Context-based commerce

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Moving money domestically and across borders is core to the world’s financial institutions and payment networks, with millions of transactions occurring globally daily. Yet processing payments and moving money today is often beset by a number of challenges. Dependency on multiple intermediaries, for instance, means limited visibility into what’s really happening (leading to manual reconciliation and higher compliance costs), possible accounting ledger discrepancies, and processing inefficiencies. Furthermore, these intermediaries charge processing fees, and contribute to settlement delays, typically of one business day for domestic transactions and two or more for cross-border ones.

Accenture helps companies address the inefficiencies, high costs, and delays inherent in today’s payment and money-transfer models. We work with companies to develop a strategy and road map for using cryptocurrencies, block chains, and digital distributed ledgers to facilitate secure, near-real-time and low-cost domestic and cross-border money movement and smart-device-initiated commerce. As part of this strategy, we define the business

case and specific use cases for these payment technologies, evaluate operating model impacts, and recommend the necessary technical infrastructure. We also assess a company’s current capabilities to help identify where gaps need to be filled, and evaluate the full range of payment technology vendors to help select the right fit for the company’s requirements.

Cryptocurrencies, block chains, and digital distributed ledger can deliver significant benefits. From a bottom-line perspective, they enhance profitability by reducing or eliminating intermediary processing fees, substantially reducing FX fees, and cutting customer service and transaction-exceptions costs. They also provide full visibility into transactions, allowing automatic reconciliation and reducing compliance costs. And they allow simultaneous settlement around the world in seconds, not days, while processing transactions 24 hours a day, 365 days a year.

Perhaps most important, these technologies create a new payment capability that can be the foundation of unique products and services that facilitate smart-device-initiated commerce—and, thus, entirely new revenue streams. That’s where the true disruptive potential of these technologies lies.

Block Chain and Cryptoprocessing: Transforming How Money Moves1

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To work effectively and at scale, the security of IoT transactions must transcend questioning. Nothing can undermine the value-generating potential of IoT more than uncertainty whether critical data is safe from breach or misuse. That’s especially true as more and more devices, operating in increasingly dispersed locations and across industries, become part of the equation.

Accenture works with companies to develop a strategy based on Digital Credential Management (DCM) to secure IoT payment credentials, personally identifiable or otherwise valuable information in transactions within an organization or across connected devices. At its most basic, DCM is the process of substituting a sensitive data element with a non-sensitive equivalent, referred to as a token, that has no extrinsic or exploitable meaning or value. Going beyond current security approaches, DCM helps minimize data risk by digitizing sensitive data into tokens that can be used with multiple connected devices across multiple industries (for example the financial, healthcare, and service sectors).

In developing a DCM strategy, Accenture helps companies answer a number of critical questions to define a comprehensive approach to IoT transaction security, including:

• What is the impact of supporting millions of connected devices?

• What user experience can be enabled with secure commerce on IoT devices?

• What role should the organization play in securing credentials?

• Where is the technology headed in two years?

• What vendor solutions and integration will the organization need to launch the service?

• What new security processes does the organization need to implement and what processes must be changed?

• What security standards does the organization need to comply with?

• How does the organization create a Digital Credential Management roadmap that aligns with its business strategy?

IoT Payments and Data Security: Protecting Confidential Data

With a powerful DCM strategy, companies are positioned to increase revenues by confidently deploying new IoT devices in new ways; reduce operational costs, for example, by avoiding Payment Card Industry (PCI) compliance and improving workflows; and lowering risks for themselves and customers through the use of superior security.

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Consumers increasingly expect companies to deliver a superior customer experience—which, at a high level, translates into streamlined, more personalized interactions that lead to greater sales conversion. That’s one of the biggest strengths of the IoT. Implemented correctly, IoT can be a powerful tool companies can use to engage their customers in ways relevant to them and to make it easier for customers to do business with the company.

Accenture has deep capabilities in helping companies use context-based commerce to engage customers and boost revenue. We team with companies to design, integrate, manage and improve the use of beacons and other connected devices to facilitate sophisticated, personalized and seamless commerce interactions that enhance the customer experience and boost sales.

A leading example of Accenture’s work in this area is the aforementioned connected car proof-of-concept, where Visa and Accenture combined innovative payment and mobile technologies to create an in-car purchase

scenario of customers ordering food from the car while on-the-go. The concept enabled drivers to access menus and pick-up options and use Visa Checkout to place and pay for an order—with beacons deployed at restaurants to alert staff when a customer’s car arrives.

Accenture played a pivotal role in the project, developing the applications and integrating several key technologies to build the technical foundation for secure and seamless payment transactions. These include the car’s head unit, cellular network, Visa’s payment technology, and the use of beacon and Bluetooth technologies.

This type of solution can transform how companies engage with customers and boost the strength and value of customer relationships. For instance, by creating personalized and interactive in-store experiences, it can increase both customer satisfaction and sales. By gathering richer data, it can generate deeper customer insights into consumer behaviors, attitudes, and shopping preferences.

By delivering relevant, timely and personalized messages (such as coupons and offers at the moment of interest), it can serve as a highly efficient and effective marketing channel.

Context-based Commerce: Delighting Customers and Boosting Sales3

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The IoT and its associated technologies are poised to significantly change the face of commerce. In fact, the IoT is already disrupting established industries and processes as forward-thinking companies deploy solutions and services that leverage the power of connected devices. These offerings are supported by strong payment capabilities that help companies take the next step and enable smart devices to make payments.

That’s why it’s important for companies to build the right capabilities now to conduct commerce via the IoT. By teaming with Accenture, companies can gain access to a broad range of proven, end-to-end capabilities in planning, implementing and

managing mobility and IoT solutions. They can benefit from Accenture’s global delivery and rich ecosystem of partners that enables Accenture to provide leading-edge mobility solutions while always giving technology-agnostic, independent advice. And they can take advantage of a suite of Accenture proprietary tools and capabilities that can accelerate the adoption and deployment of mobility and IoT solutions.

With Accenture’s help, companies can prepare their organizations to compete and thrive in an IoT world.

Accenture: Helping Companies Maximize the Value from the IoT

Copyright © 2015 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

References1 “Seize New IoT Opportunities with

the Cisco IoT System,” Cisco website, http://www.cisco.com/web/solutions/ trends/iot/portfolio.html

2 https://disneyworld.disney.go.com/plan/my-disney-experience/bands-cards/

3 “Accenture Helps Visa Build Connected Car Commerce Proof-of-Concept” March 2, 2015, https://newsroom.accenture.com/news/accenture-helps-visa-build-connected-car-commerce-proof-of-concept.htm

ContactsIf you would like to hear more about Accenture’s views on this topic or would like to discuss how you can address the strategic questions highlighted in this paper, please contact:

Tim Summers Managing Director timothy.summers@accenture.com

Richard Meszaros Senior Manager richard.t.meszaros@accenture.com

Greg Riché Senior Manager gregory.riche@accenture.com

About Accenture DigitalAccenture Digital, comprised of Accenture Analytics, Accenture Interactive and Accenture Mobility, offers a comprehensive portfolio of business and technology services across digital marketing, mobility and analytics. From developing digital strategies to implementing digital technologies and running digital processes on their behalf, Accenture Digital helps clients leverage connected and mobile devices; extract insights from data using analytics; and enrich endcustomer experiences and interactions, delivering tangible results from the virtual world and driving growth. To learn more about Accenture Digital, follow us @AccentureDigi and visit www.accenture.com/digital.

About AccentureAccenture is a global management consulting, technology services and outsourcing company, with more than 358,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$31.0 billion for the fiscal year ended Aug. 31, 2015. Its home page is www.accenture.com.

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