Making payments on a television may seem like a Jetsons-era dream, but it's drawing the attention of modern-day payment companies that see the disruptive potential of TV.
"We feel that the same way mobile phones changed user engagement and how consumers pay for content on the devices can happen with smart televisions," says Brian Daly, product manager for DataCash, a MasterCard processing subsidiary. "People can engage content for their favorite brand using a split screen, or an app that allows payments and delivery of products that appear on television."
DataCash is working with TV App Agency, a company that provides a platform to develop apps for Web-enabled television sets, or "smart TVs."
The partnership's early work will focus on the best way to use existing technology to execute and process transactions in a market that's still at a very early stage, Daly says.
"There is a massive opportunity with smart TVs, but we want to find out what the engagements would look like to make payments," Daly says.
TV App Agency's apps are coded to work across television brands, and the company will work with DataCash on form factors, and how to leverage new and existing television and payments technology.
"We're looking for ways to drive commerce transactions to the smart TV itself. The challenge is getting credit card details upfront and not having to do that for each transaction," says Bruno Pereira, co-founder of TV App Agency. "We want to make it as easy as possible to make purchasesyou see something on TV that you want to buy and you hit a button do to so."
The challenges involve hardware, software and logisticsand DataCash and TV App Agency will test different models for user comfort. The companies will also extend their tech tools to developers to build payment, shopping and marketing technology that can be used on smart TVs, or used as part of a "split screen" or multi-screen experience with a tablet or smartphone.
"Would you make payments using your remote control, or your mobile phone? Or will it be gestures, or something else? Would the goods you pay for on TV be delivered, or picked up in partnership with a local store?" Daly says.
Given the lack of an established television payments industry, the partners will also look at security and compliance with industry rules such as the Payment Card Industry (PCI) data security standard.
"We'll look at how to use different payment types, such as tokenization to store card details, or how to make sure the merchant or developer is out of PCI scope," Daly says.
"Payments on TV are part of our cross-channel transaction services strategy," said Michael Esnault, an area marketing manager for Ingenico in Lyon, France, in an email to PaymentsSource. "At Ingenico, we believe that with the rise of connected TV adoption, TV is on its way to becoming the next purchasing screen requiring new suitable payment methods."
Ingenico has developed technology to enable TV payment through Axis, the same transaction management platform used in retail locations.
Consumers enroll and activate their account through an Ingenico terminal in the store. At account creation, consumers select a six-digit password.
While at home, consumers see ads appearing on the display of their smart TV. Viewers use their account to purchase products using their TV's remote. Consumers trigger a card-not-present payment through Ingenico's Axis centralized transaction platform, Esnault said.
Television payments present potential business difficulties, particularly given the likely role of cable companies, says Andy Schmidt, a research director at CEB TowerGroup.
"If the payment is over the air, you would need a payment arrangement with the cable company, and there would be data and bandwidth issues," Schmidt says, adding that could lead to higher cable bills.
That said, there is potential to tie television content to payments, Schmidt says.
"Sports would be a good place to start," he says. "The NFL and baseball are all about jersey sales, which could be sold while the players were on TV."