One of the major disadvantages of smart home devices is the one-time fee you as a business earn for your product.
You invest a lot of effort to develop hardware, software, set up the infrastructure requiring constant maintenance. But customers pay you only once for your sensor, smart doorbell or thermostat, though you keep improving it by releasing firmware updates and providing technical support.
That’s why many manufacturers think about how can they offer value-added services for an additional fee or even motivate users to switch to a recurring payment model.
Examples? You may have already heard about smart home devices helping users to replenish their supplies. Samsung’s Hub refrigerator has interior cameras to analyze the stock and let users buy necessary items from a partnering grocery within its app. Some Whirlpool washing machines come with Amazon Dash to allow users to refill laundry detergents automatically.
The manufacturer in these cases, of course, gets a percentage from a transaction as a middleman.
But other approaches are also possible.
For instance, customers can pay an additional fee to get a specific set of recipes or presets for a smart oven, or some space in a cloud storage to keep their surveillance camera recording video 24/7, and so on.
And this is where the problem comes: how to implement a payment feature?
At least three options are available here.
You can build a payment system right into your product. Think of Amazon Dash. One button to make a specific purchase. Here are the pitfalls of this solution:
IoT devices are still too vulnerable today. Users can be skeptical about solutions having access to their e-wallets. Customers with kids would also probably prefer to not make it possible for their children to make automated payments.
How a user can be sure that the payment has been processed? What if the connection was terminated during data transfer, what’s then? When the ordered stuff is going to be delivered?
If the process is unintuitive and unclear on every its step, that may frustrate your customers.
Building a payment processing system as a part of your product from scratch may turn out to be a pain in the neck.
With mobile, there are some ready-to-go solutions. In IoT, they are still in their infancy:
In both cases, your product will require significant update to either be compatible with an above-mentioned OS or get a Qualcomm’s SoC onboard.
The simplest way to implement payments is in-app purchases inside your product’s companion app. That’s an optimal solution, considering the fact that the transaction security is already provided and guaranteed by Apple and Google.
But what if your smart home device does not require a full-fledged mobile companion app?
The era of voice-driven digital assistants is on the rise. Just take a look at these numbers:
If you have doubts regarding your customer’s readiness to make voice payments, here’s a beautiful example: in India, where millions of people still struggle at typing and operating smartphones, voice directions become their salvation for digital payments. After all, we all find talking a more natural process than handling with new technologies.
And while Amazon, Google and Apple are already fighting for the presence of their voice assistants in our households, it’s just about time for smart home device manufacturers to make sure their products are compatible with these assistants and allow voice-directed payments.
Just imagine these commands:
And enabling them is much easier than setting a payment module from scratch from developers’ point of view.
Sure, enabling such commands is not enough to actually increase sales and your income. Users should be properly motivated to pay you more. But that’s a completely different story.