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Payments and commerce sector tests IoT concepts in "Alexa challenge"

With the Internet of Things about to blow up, businesses are testing how to interact with customers on new platforms.

With the Internet of Things (IoT) projected to account for nearly half of the world's connected devices in just a few short years, opportunities abound for businesses to connect with customers. There are some opportunities, however, they should probably pass on. For instance, while you may want to look up a recipe on your smart fridge, you probably don't want to bother paying your bills on it.

For the past five weeks, 13 companies have been testing out various concepts for interacting with customers with one of the most consumer-friendly IoT interfaces available -- Amazon's voice-activated Alexa. They're competing in the "Alexa Challenge," hosted by the payments and commerce site PYMNTS.com, and the winners of the challenge will be announced Monday at Noon ET.

While the entries all focus on payments and commerce, there's a range of participants: The company DaVincian Rx, for instance, entered the Alexa Challenge with a prescription assistant that helps people stay on track with medication plans, refill prescriptions and make use of different payment and delivery options. Meanwhile, the companies Zipscene and Feasty teamed up to develop an Alexa-enabled service that delivers dining deals based on individual consumer preferences.

The company Fiserv, which provides techology solutions for banks and credit unions, used the Alexa Challenge to test out functions that allow consumers to engage with Alexa as they would a bank teller. That means using it for activities like checking account balances or asking for the latest mortgage rates.

Fiserv previously tested out voice-activated services, and they've conducted consumer research and focus groups to learn what customers are looking for -- and what they're not.

"One of the important aspects we need to consider when we design is consumer choice and preference," said Scott Hess, Fiserv's vice president of user experience, consulting and innovation.

About five years ago, Fiserv built what Hess describes as a "mobile banking Siri-equivalent." While not too different from the company's current Alexa skill, the mobile assistant "pretty much bombed," Hess said.

Consumers, it turned out, weren't interested in conducting banking on the go. With Alexa-enabled home devices, however, the use case is different, Hess noted. "People are in their homes, often getting ready for work in the morning, asking Alexa to help them with things they might need to do, and one might be banking."

Fiserv has been mindful about allowing consumers to opt out when they feel like it -- whether that means configuring off a particular channel or device, or enabling a "quiet time" setting that pauses notifications overnight.

For security reasons, Fiserv is only letting consumers do so much with Alexa -- a user can't access full account data or add a new person to a peer-to-peer payment list. That said, Hess thinks the use of biometrics, such as facial scans or voice authentication, could make IoT eventually more secure than our current connected devices.

Hess said Fiserv isn't ready to launch its Alexa-powered product until they know it will gain real traction, though one large credit union has already expressed interest in it.

"I think it's going to take a little bit of consumer services adoption before you see a real penetration of banking in the IoT," he said.

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