We often talk about B2B and B2C, but here's another business model acronym for you: M2M.

M2M (machine-to-machine) business models refer to models that deal with communication between devices, as enabled by the Internet of Things. For example, if you've ever looked at the GPS on your phone and noticed a little icon identifying where your car is parked, that's M2M communication. So are the notifications your smartwatch or Fitbit push to your phone about your physical activity. If you or your electric company uses a smart meter to track energy consumption in real-time, that's M2M. Like asset trackers, businesses use—such as GPS devices that follow delivery vehicle movement—and supply chain management solutions like RFID systems or automated stock management systems.

How widespread are M2M communications? In 2020, there were 8.9 billion machine-to-machine connections across the globe, according to a recent survey. The result was a 20 percent increase from 2019, and with an estimated CAGR of 19 percent, it is estimated there will be 14.7 billion M2M connections globally by 2023.

Monetizing M2M Transactions

Despite this continued staggering growth of this market, many questions remain as to how each member of the M2M ecosystem will monetize their particular domain. (Like marketplace billing, the challenge involves ensuring the right providers are paid the right amount of money for the right volume of usage.) One thing is for certain: the automated and complex nature of M2M requires an accounts receivable and billing application that is powerful and flexible enough to scale as more connections and devices are added. This need is amplified given the demand for complex pricing scenarios driven by individualized consumption and unique customer needs.

So, how are M2M communications monetized? According to a presentation given by Informa, typical billing and AR scenarios for businesses delivering M2M services:

1. Low-Cost Business Model: This first model includes a flexible platform designed to be scalable and support high usage volumes, with low ownership costs and a low average revenue per user value.
2. Massive Scale: Model two is designed to reduce operational expenditure with high availability architecture that supports high volumes of recurring and usage-based billing.
3. Multi-Party Value Chain: The third model, designed for complex value chains, handles commissions and settlement, handles retail and wholesale pricing models, and includes global support as well as in-depth analytics for efficiency.

While each model is a little different—and there are countless additional variations—they all have one thing in common: they're too complicated for the average traditional or legacy billing platform.

The Right Billing System for M2M Transactions

As each of the above models progresses in its complexity, so does the requirement for an automated AR and billing solution that scales to support a complicated and massive M2M value chain – one that that not only automates accounting processes, but also helps to streamline service provisioning and billing as the M2M business becomes more complex.

The Gotransverse platform was designed to support just this complex billing environment. For instance, with ecosystem billing built into its core framework, the platform can be configured to automatically manage the accounts receivable processes of complex M2M ecosystems. For B2B service providers, Gotransverse enables customers to establish multi-dimensional pricing that includes commissions, settlements, and unlimited pricing scenarios. Gotransverse is cloud-based, scales easily, and is purpose-built to help M2M providers manage super complex financial and billing requirements at each growth stage.

M2M communications is a large and rapidly growing market, but an inadequate billing platform can keep businesses from taking advantage of its potential. Don’t get caught trying to figure out how to manage the pricing, billing, and AR complexities after your ecosystem takes off. We invite you to tour the platform today to learn how Gotransverse can empower your M2M monetization (and countless other billing initiatives). Then, when you’re ready, request a demo, and one of our experts will reach out to discuss further.