Samsung Family Hub Fridge: where IoT and payments meet

Friday 8 January 2016 | 12:41 CET | Background

From May 2016 onwards American consumers can purchase the Samsung Family Hub refrigerator, allowing them to order groceries from their fridge door. It was developed in partnership with Mastercard which in November 2015 set up a special program to integrate Internet of Things (IoT) and payments. Samsung and Mastercard weren't the first ones to combine the two as for example Paypal had already developed an app which is integrated into a smartwatch. It is likely that with the range of devices connected continuing to grow, the number of devices enabling payment will also increase.

Samsung recently revealed the new smart fridge at the 2016 CES show in Las Vegas. The app was developed in partnership with Mastercard, but other cards can also be used as payment method. To start with two grocery stores in the New York area are participating: Fresh Direct and ShopRite. Consumers can add items to their shopping list by scanning a barcode with their mobile phone. The mobile phone can also be used to check what's inside, as captured by three cameras. The final shopping list is approved with a 4-digit PIN. According to Mastercard, additional grocers will be added to the Groceries app through MasterCard’s partnership with MyWebGrocer, which provides ecommerce and digital marketing solutions for more than 130 grocers across the globe and over 500 major consumer packaged goods brands.

Mastercard has been working on integrating IoT and mobile payments for some time. In November 2015 it announced that it was introducing a program focusing on combining the two. Their aim was to bring MasterCard payments to a range of consumer products across various industries such as automotive, fashion and wearables. According to Mastercard the program will give consumers the freedom to shop using the device or thing that is most convenient to them, with the highest level of security available.

This smart fridge brings mobile payment via an IoT device into the home but it is not the first device which combines the two. Paypal was one of the first to develop a payment application for wearables such as a smartwatch and its app is featured on the Samsung’s Gear 2 and Gear 2 Neo. Tencent, a tech company which owns China’s largest social network, QQ, as well as the widely used messaging app WeChat, has introduced its mobile operating systems “TOS” and “TOS+”. These two operating systems work on multiple devices including smart TVs and smartwatches, and can also enable mobile payments.

Google is working on its own IoT operating system, Brillo, and it would make sense if they were to integrate its payment facility at some stage. Apple could do the same, by integrating Apple Pay into its Apple Home Kit. Visa introduced a connected car in April 2015 which is able to make mobile and online purchases on the go. Order at your local drive-thru and the car completes the transaction thanks to an embedded chip and Bluetooth.

As the entire IoT ecosystem is still very much in development, it remains to be seen which players will take the lead in integrating mobile payments into the various connected devices. It may however be that the payment method will become completely irrelevant to the consumer. As long as the payment is made automatically, it will not matter whether it is paid for directly from the app or via a direct debit from the current account. The possibilities of combining IoT and payments seem endless: the smart fridge could automatically order and pay for items you have run out of; the smart home unit could automatically pay the utility bill; theme parks and gyms could combine sensors and mobile payment to allow for usage based fees; wearables could give retailers the option to tailor their marketing and offer customers personally customised offers such as a reduction or two-for-the-price-of-one, which could be paid for via the wearable device etc.

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