Will smart speakers lead to smarter payments?
By Beth Kotz, technology and personal finance analyst
It began as a novelty, but the voice-controlled digital assistant has quickly become the hottest trend in tech.
With the explosive growth of the Internet of Things, and particularly of smart speakers like the Amazon Echo and Google Home, voice commands are becoming more powerful and pervasive than ever, changing the way we do everything from checking the weather to scheduling a doctor's appointment.
One area in which this technology is quickly growing is in commerce, where the ability to make purchases and payments via voice represents a key step toward a truly frictionless shopping experience. Are voice commands — and the smart speakers that enable them — the payment trend of the future? Let's look closer to find out.
How smart are smart speakers?
The success of voice shopping depends largely on the capability of the digital assistants that power it. Amazon's Alexa, the AI brains behind the Echo smart speaker and smart home hub, is already well-integrated into the company's enormous retail ecosystem, giving Amazon a clear head-start when it comes to voice-command payments. Alexa also offers the ability to pay credit card bills, send payments to other users and manage select bank accounts.
Google Home has introduced several similar features, and a partnership with retail giant WalMart has brought hundreds of thousands of items into the voice shopping fold. Apple's digital assistant, Siri, has typically lagged behind by comparison when it comes to voice shopping. That may soon change with the introduction of Apple's first smart speaker, the HomePod, but Siri still lacks the built-in retail connections its competitors can offer.
Consumers find a voice
Though only about eight percent of people currently use voice commands to make purchases or payments, analysts expect that number to grow rapidly in the coming years. Rather than big-ticket purchases, however, it's smaller everyday transactions where voice commands have gained the most ground. Google Assistant's partnership with Walmart and Alexa's integration with the Amazon marketplace provide quick, relatively frictionless purchases for a variety of everyday goods. Users can also use voice commands to make peer-to-peer transfers through services like Moneygram, Venmo and PayPal.
Voice integration goes mainstream
Considering the human voice is our most convenient and powerful method of communicating, it's no surprise that it's proven to be a great way to interact with technology. Indeed, tech companies are rushing to introduce voice control into devices ranging from refrigerators to alarm clocks. This raises the possibility that all manner of smart devices and appliances might soon be capable of handling payments and purchases, whether it's directing a fridge to order more groceries or asking a washing machine to stock up on laundry supplies. As consumers become more comfortable with - and expecting of - this conversational approach to commerce, voice shopping will only become more prevalent and more capable.
The future of voice shopping
As it stands now, voice shopping is largely the domain of the early adopter. To push into the mainstream and enjoy widespread adoption, there remain several issues to overcome. The first is security, which may ultimately require biometricsor other advanced technologies. Second is greater integration with both payment methods and retailers, which will help to remove some of the final friction points in the payment process. Though many users are currently driven to make purchases via vocal commands because of the sheer novelty, voice shopping must prove to be more convenient and seamless than other methods in order to hold up over the long term.
Mobile payments have already revolutionized the way we handle transactions, and voice commands represent a natural progression in that space. There are still kinks to be worked out, but the promise of frictionless, hands-free payments is too great to ignore. Whether it's through smart speakers or a proliferation of other IoT-enabled devices, voice shopping represents a powerful way to drive sales and create a better shopping experience for consumers.
Beth Kotz is a freelance writer and contributor for numerous home, technology, and personal finance blogs. She graduated with BA in Communications and Media from DePaul University in Chicago, IL where she continues to live and work.