During a keynote address at the Merchant Payments Ecosystem 2024 in Berlin, Hemlata Narasimhan, President of Elavon, painted a vivid picture of what a smart city could resemble by the year 2030, drawing inspiration from Venice, Italy.
Narasimhan’s presentation commenced with a vision of a futuristic AI version of Venice, illustrating how this advanced urban environment could seamlessly manage a variety of services. This smart city concept would facilitate automatic congestion charges, allow tourists to effortlessly book and pay for gondola rides through biometric technology, and operate autonomous electric vehicles efficiently throughout its streets.
This forward-thinking interpretation of a smart city encompasses all aspects of payments, including transportation, dining, retail, and entertainment. By leveraging facial recognition and integrated digital payment systems, consumers could experience a frictionless payment process—where expenses are settled automatically without disrupting their enjoyment. Narasimhan envisioned a lifestyle where financial transactions blend effortlessly into daily experiences, such as dining out or shopping.
She elaborated, “When someone enters a venue, whether it’s a museum or a transportation hub, and makes a payment using biometric technology like facial recognition, the process relies on substantial data regarding identity, age verification, and available funds to authorize transactions. While the interaction appears simple and seamless to users—reflecting our customers’ desires—there’s considerable complexity supporting it, involving intricate data and technology networks.”
Narasimhan emphasized that data plays a vital role in safeguarding consumers from unintended charges, which is integral to the future of smart cities. Digital identity could be integrated into payment wallets, enhancing accessibility for individuals with disabilities or health challenges.
In her conclusion, Narasimhan affirmed the feasibility of this envisioned future, which promises to enhance the customer experience, promote sustainability, and foster financial inclusion. However, she underscored the importance of forming a collaborative network of partners to determine the data requirements necessary for optimal smart city functionality.
### IoT-Driven Automated Payments
Bas van Donselaar, Head of PaymentsGenes Consultancy, followed with insights into the potential of machine-initiated transactions, echoing Narasimhan’s themes by discussing advancements facilitated by the Internet of Things (IoT).
He presented scenarios in which IoT could automate payment processes, such as charging electric vehicles at charging stations, utilizing geolocation to determine transport fares for commuters, and implementing road pricing strategies aimed at alleviating urban congestion.
Van Donselaar stressed the existing challenges in developing smart cities, cautioning that many of the presented payment solutions operate asynchronously—meaning transactions do not occur in real-time—which introduces inherent risks. He noted the difficulties of embedding level-three data within transactions and highlighted the necessity for consumers to provide consent upfront. The current landscape does not yet permit users to simply take goods and leave a store without prior agreement.
He urged the creation of a robust framework to ensure that sensitive data remains secure while supporting a seamless ecosystem for automated payments.
### Panel Discussion: Smart Cities, Connected Devices, and Digital Payments
Moderated by Carmela Mesquita, a panel discussion featured experts Narasimhan, van Donselaar, Paul Pike from Fan Engagement Group, and Andrew Vorster of The Banking Scene. They scrutinized the previously outlined possibilities for smart cities, with Vorster raising valid concerns about data utilization and consent across systems. He referenced the experiences of commuters in Milan who often choose to drive due to unclear costs associated with public transportation. This has prompted municipal authorities to consider a fare-cap system to prevent overcharging, underscoring the importance of transparent pricing in automated transactions.
Narasimhan reiterated the potential of payment data to enhance decision-making in smart cities, emphasizing the importance of equipping consumers with necessary data for informed choices. “We should not resist what consumers naturally wish to do; that’s a losing proposition. The challenge lies in providing users with accessible fare comparisons and upfront cost information to enable them to make better decisions.”
Van Donselaar highlighted interoperability and obtaining consumer consent for data sharing as pivotal hurdles. He also commented on the urgent need for improved data privacy regulations, especially regarding sensitive biometric information, advocating for a balance between user accessibility and data protection.
Vorster pointed out that payments data could significantly influence consumer behavior toward public transportation. By offering rewards for consistent usage, municipalities could encourage a shift away from private vehicle use, thereby promoting sustainable practices.
Pike shed light on the disconnect between festival promoters and attendees, indicating that missed opportunities for data collection hinder revenue generation in events due to reliance on external intermediaries.
In closing, Vorster envisioned a future enriched by generative AI, where digital wallets evolve into intelligent systems capable of making payment decisions on behalf of users, further integrating convenience into the framework of smart cities.