At next month’s IFA show in Berlin, electronics company Infineon will present what it sees as the most important trends for the future of payments: digital wallets and payments through IoT connected devices, as well as biometrics.

The German company will discuss mobile and contactless payments, digital wallets and biometrics, future topics from a few years ago that have now become part of everyday lives. But how will people pay in the future? Will cash and banking cards disappear? And how will this change daily lives?

Infineon offers a portfolio of security chips available in easy-to-integrate and scalable delivery forms. With the Secora Pay and Secora Connect families, Infineon expanded the reach of its core technology to application specific full system products based on hardware and software enabling trusted, convenient and secured payments.

“Users expect reliable and convenient payment methods that fit their everyday life,” said Ioannis Kabitoglou, head of Infineon’s digital security and identity business. “One in two bank cards use a microchip from Infineon. We want to make digital payments via connected devices accessible to as many people and businesses as possible worldwide. Ease of use and security go hand in hand.”

Around 82 per cent of retail payments worldwide are contactless, either traditionally by bank card, or via smartphone or wearable electronics such as watches and rings. They make payment faster, easier and – especially in times of pandemic – more hygienic.

Contactless payments have already become standard today, and cards with integrated fingerprint sensors for authorisation are emerging. As early as 2024, up to 60 million such bank cards with biometric authorisation including a built-in biometric sensor are expected to be in circulation, according to ABI Research. Yet new biometric authentication methods enable far more possibilities.

Just as the internet has revolutionised shopping behaviour, the IoT will bring a whole range of connected devices that will be used for payment transactions in the future. Biometric authentication will play an important role in securing payments and making them as user-friendly as possible.

Today, purchases in cars can already be approved by fingerprint. In future, facial recognition could play a more significant role. And when orders are placed via the smart speaker, the device can also identify the owner’s voice and initiate both order and payment. This allows a seamless user experience.

More than half of retail transactions were conducted online in 2021. Around 48 per cent were processed by digital wallets. This opens up simple, convenient payment options for users with their device of choice. Merchants benefit from fast and secured payment processing and low transaction fees.

Not only people, connected devices will initiate and process payments in the IoT as well. By 2025, there are expected to be around 2.7 billion pay-enabled and connected smart home devices on the market, according to Juniper Research. Tomorrow’s refrigerator, for example, will be able to order milk or pizza, if the smart speaker hasn’t already done so by voice control, all paid for thanks to an integrated security chip.

IoT payments are also simplifying everyday lives outside homes. For example, more charging stations are recognising the electric car and processing payments automatically, known as plug and charge. Moreover, market researchers expect the revenue potential of in-car payments to grow to $86bn worldwide by 2025.

While this enables new, convenient shopping experiences, it also increases the requirements for the payment processes. Connected remote payments and the integration of networked devices require not only general device security but also the reliable safeguarding of biometric and private information of the user, the storage and provision of proof of transfer, and the fulfilment of specific legal requirements for two-factor authentication. Data protection, data security and user-friendliness are not mutually exclusive.

Infineon offers contactless security chips with EMV certification for bank cards, embedded security for connected devices and sensors for recognising biometric features. They open up consumer-friendly possibilities in payment transactions for banks, fintechs, and card or device manufacturers.