The future of payments: Programmable payments for the Internet-of-Things (IoT)

Authors: Maximilian Forster, Jonas Gross, Anja Kristina Kamping, Serkan Katilmis, Dr. Mario Reichel, Prof. Dr. Philipp Sandner, Philipp Schröder

Digitization is taking hold of entire industries, including in Germany. The area of the “Internet of Things (IoT)”, in particular, promises revolutionary, new types of business models. In this context, the term IoT refers to the increasing connection of machines and devices to the Internet. These devices are equipped with digital identities to communicate with each other and execute processes autonomously without human intervention. This trend will become increasingly relevant in the future. For example, the total number of IoT devices is expected to rise to 75 billion by 2025, according to estimates.

Download the English paper here (German version here).

In this context, the distributed ledger technology (DLT) will play a key role. A DLT can be used for the underlying IoT business models as a trustless, standardized, and highly automated infrastructure on which IoT devices can act autonomously. However, to realize the full potential of the digitization of the industry and the IoT, the entire payment process must be optimized and adapted to the needs of IoT payments. Consequently, the payments associated with these new…