Payments from smart home devices are expected to explode over the next few years. A new Juniper Research study has found that the total transaction value of smart home payments, payments that occur via smart home devices, will exceed $164 billion in 2025, from $22 billion in 2020.
The research, titled Assessing the Smart Home Payments Opportunity, predicts increasing use of voice assistants via smart speakers for e-commerce, propelled by rising user and merchant acceptance, will drive dramatic growth of over 630 percent over the next five years.
The report predicts that smart displays will be transformative for voice payments in the home, by allowing users to see products and confirm purchases.
To facilitate this, voice assistant vendors must ensure that the checkout process handoff between smart speakers and smart displays is seamless; unlocking more.
Digital Wallet Ecosystems Are Critical to Growth
The new research also finds found that digital wallets will be crucial to the success of smart home payments. It recommends that smart home device manufacturers combine the massive installed base of payment-enabled smart home devices, which will be over 2.7 billion by 2025, with popular digital wallets, such as Google Pay or PayPal, to best access existing digital payments users.
“Smart home device vendors must prioritize payments acceptance by merchants; making the integration of digital wallets a top priority for smart home vendors. This integration will enable smart home vendors to deliver compelling and familiar user experiences, whilst also ensuring the security required for success,” said research co-author Nick Maynard in a statement.
The research also found that connected TV payments will be highly significant; accounting for over 20 percent of total transaction values in 2025, and supported by strong levels of content purchases. However, the opportunities for connected appliance payments will be limited, according to the researcher. Connected appliances will account for less than 1 percent of total smart home payments values in 2025, as they are restricted by the high price of payment-capable appliances and the lack of supporting delivery services.