Machines that pay each other using digital wallets


People use digital wallets such as Venmo and PayPal and, more recently, cryptocurrencies such as bitcoins to make frictionless payments, peer to peer. What if machines could use digital wallets to make frictionless payments, machine to machine?

Autonomous vehicles — such as cars, fork lifts, trucks or any industrial machine — could pay for their own energy or fuel, maintenance and insurance. Moreover, in a shared economy, vehicles (or industrial machines) could earn money by renting themselves to other machines and being paid by those machines based on usage.

Although cryptocurrency payments between people and organizations have been powered by distributed ledger technologies (DLTs) such as Ethereum Blockchain, these distributed ledger technologies are not suitable for machine-to-machine (M2M) transactions because M2M transactions happen much more frequently, and these distributed ledger platforms carry transaction fees. Moreover, M2M transactions have high data volumes, have very low resource requirements and demand low latency.

Enter IOTA, a distributed ledger platform for the Internet of Things (IoT).

An electric vehicle that pays for its energy

At DXC Labs, we are exploring no-fee M2M micropayments with a solution that uses IOTA. We built a smart, decentralized solution to show how electric vehicles can make fast, secure, frictionless payments to charging stations — and power up the future of the M2M economy.

In our smart charging station solution, a prototype electric vehicle plugs into a charging station. The electric vehicle and the charging station each have their own digital wallet. Payments between these wallets happen automatically after the vehicle is fully charged. A smart meter tracks usage for calculating payments, which are made with IOTA’s cryptocurrency, MIOTA. Our electric vehicle can also pay for its maintenance and insurance via M2M transactions.

In this micropayments example, the car, charging station, repair shop and insurance company all have their own digital wallets and can pay each other directly.

In this micropayments example, the car, charging station, repair shop and insurance company all have their own digital wallets and can pay each other directly. Click image to expand.

IOTA is based on a new distributed ledger technology called the Tangle. An emerging technology being developed by the open source community, IOTA is a no-fee transaction and payment settlement platform. It is highly scalable, provides secure data transfer, is quantum immune (secure against quantum computer attack), and is designed for the low network resource requirements common in many machines. With IOTA, we are able to distribute and synchronize ledgers of data and money in secure, decentralized environments.

This IOTA charging station prototype connects to an electric vehicle, which charges its battery and pays using its IOTA wallet. No human intervention is needed.

This IOTA charging station prototype connects to an electric vehicle, which charges its battery and pays using its IOTA wallet. No human intervention is needed.

With our M2M approach, we have enabled machines with wallets and provided secure identities to the machines — all without needing a trusted intermediary like a bank, or human intervention

New possibilities

Potential uses for M2M wallets include: power and energy trading between smart grids and homes, connected vehicles paying for parking, and industrial machines paying 3D printers to print replacement parts. These are entirely new business models that weren’t possible with traditional financial systems.

Enabling machines with wallets, so they can pay each other, is an exciting new paradigm with countless possibilities. As next steps, we are working on leveraging Masked Authenticated Messaging of IOTA to provide a secure, immutable, auditable and tamper-proof way of accessing the data streams emitted from these machines for a wide range of digital twin and Industry 4.0 uses.

Vijaya Kumar Bhavani, principal technologist at DXC Labs India, applies emerging digital trends such as machine-to-machine, Industrial IoT, AR, VR, MR and AI to solve industry problems and transform customers’ businesses to deliver high-value services for operations, improvement and efficiency. He has more than two decades of industry experience in next-generation digital platforms, application modernization, cloud-native apps, mobile apps and industry software product development. @vijay10000

Gopalakrishnan Rajaram, a technologist at DXC Labs India, focuses on the Internet of Things and machine-to-machine transactions. An innovation champion, he has earned several hackathon awards at internal and external events. He specializes in microcontroller programming, Python, mobile apps, cloud, client-facing next-generation prototypes and cryptocurrency solutions such as IOTA. @Gopal_Rajaram


  1. IOTA Charging Station – demo video can be found in the below link:

  2. Anne Marie Wouters says:

    What if the payment cycles are being hacked,M2M,? and all payments are slushed away, or what if there is a problem and the logistics of machinechains paying eachother doesn’t work anymore? Or when machines run out of power? We see the experiment with automatically operated electric cars: they bump into lorries, so what about safety of such M2M within a blockchain technology…

    • These are all valid questions!
      Every new technology need to go thru resistance and seasoning for it to evolve and handle more and more anomalies. We should ask these questions and make engineers work on these problems to come out with reliable solutions. We are still in the evolving PoC stage.

      Apart from this cryptocurrency implementation, there are many more features available in DLT, like immutable data (MAM). Using MAM, we are building solutions for healthcare devices to be able to perform OTA (Over-the-Air) firmware update. A pull mechanism from device will be used for OTA update. The updates are committed only after the new software is completely copied into device memory. This way, the power outage anomaly can be handled.

      Providing sustainable power backup option is a issue in every similar business case like what you have mentioned. This will need out of the box thinking like arranging rooftop charging stations for Drones to charge itself when required.


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  2. […] Financial transactions – This component stores all transactions and automates micropayments between machines without any manual intervention. This component can be directly applied to the automobile industry for vehicle charging, toll payments, parking place payments and more. Details are available in this earlier post. […]

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