Today, people are looking to take advantage of new technologies that help them make purchases from the convenience of their car’s dashboard. In-car payment technology is an exciting area of innovation and an amazing opportunity for vehicles to be part of the everyday commerce experiences.
Seizing the opportunities
Connected car commerce is a USD 230 billion opportunity. In the US only, 135 million people spend 51 minutes in their cars, commuting to work, and 73% of them connect to the internet while driving. In addition, 64.9% of commuters choose to use a voice assistant provided by auto manufacturers for diverse needs. In 2018, more than 1 in 5 European workers spent 90 minutes or more of their time on their way to and from work. On average, European workers spend 1 hour and 24 minutes a day commuting, travelling 28.56 km in total.
According to a Visa report from 2018, the 135 million US commuters spend more than USD 210 billion a year on gas, parking, food, coffee, and groceries as part of their drive to and from work. Purchasing goods and services directly from or adjacent to the car, as fast and seamless as possible, is something consumers have started to expect.
We currently see car manufacturers, card networks, retail brands, financial institutions, travel companies, mass transit agencies, and other mobility providers enabling better, more connected experiences and equipping vehicles with in-car payment systems. Therefore, our cars simply become wallets and we, as drivers, no longer need to get out of the vehicle to pay for gasoline, parking spaces, and other services.
The road so far
The in-car payments race begun in 2015, when Shell launched a mobile payment service in the UK, the Fill Up & Go mobile payment system. Working with Apple Pay, Android Pay, and PayPal, the technology enables the use of PayPal to pay for fuel through a smartphone at the gas stations. According to Shell, the launch is in direct response to customers that wanted faster and easier ways to pay for petrol.
In 2016, Mastercard partnered with General Motors and IBM to integrate payments into OnStar Go, an AI-powered version of the General Motors’ OnStar system. This new version allows drivers/ passengers to make payments for goods and services using credit and debit cards within their Masterpass wallet. It is also designed to learn from the user’s behaviour and then bring them personalised offers from third-party partners.
Dubbed as the ‘world’s first in-car payment system,’ launched in February 2017, initially in the UK and then globally, the payments system developed by Jaguar and Shell allows drivers to fill up the vehicle and go as the car pays for the fuel. Users no longer need to use a card at the pump or queuing in the forecourt shop; they can install the Shell app, drive up to any pump at a Shell service station, use the vehicle’s touchscreen to select how much fuel they require, and pay using PayPal or Apple Pay. An electronic receipt is displayed once the payment is completed and is sent to the driver’s email address.
One year later, in January 2018, Honda revealed at Consumer Electronics Show that it was conducting ‘the first proof-of-concept demonstration of in-car payments’ for parking and fuel. The demo was part of Honda’s ongoing partnership with Visa. Both companies wanted to install beacons that communicate with a Honda via Bluetooth in order to complete payments through a Visa Checkout integration.
In April 2018, Chevrolet teamed up with Shell to launch a similar payments feature that allows drivers to pay for gas from their vehicle’s infotainment screen. It is the latest feature of General Motors’ new Marketplace service in which owners can pre-purchase coffee and gas or make restaurant reservations from the driver’s seat. The new service was initially rolled out for Shell station in Detroit, Seattle, and Houston and then all across the US, at over 14,000 stations. One month later, Hyundai announced a plan to work with automotive software company Xevo on an in-car credit card payment service that enables drivers to find and pay for coffee, gas, and parking from their infotainment screen. Xevo will help the automotive manufacturer build a wallet platform that securely stores customer credit card and PayPal account information. Chevron, Texaco, ParkWhiz, and Applebee’s have already signed on as merchants for this new payment concept. And the system goes beyond credit and debit, allowing other options (such as gift cards) to be incorporated.
Early January 2019, Mastercard and HERE Technologies agreed to jointly create more connected experiences for people on the move, with the aim to take the friction out of an increasingly mobile world and shape the next generation of connected vehicle services. The partnership is part of Mastercard’s work in partnering with car manufacturers, travel companies, mass transit agencies and other mobility providers, to enable more connected experiences for residents and visitors traveling to and within global cities.
That same month, Honda presented its prototype, Honda Dream Drive, the automotive industry’s ‘first integrated driver and passenger infotainment, commerce, services, and rewards dashboard.’ Developed in collaboration with Connected Travel, the new prototype enables drivers to pay for goods and services like fuel, movie tickets and parking, make restaurant reservations or order food.
In January 2019, Visa and SiriusXM Connected Vehicles Services also launched an in-vehicle payment solution, SiriusXM e-wallet, which is designed to integrate into the dashboard and allow drivers and their passengers to shop and pay for coffee, find and pre-pay for gas, locate and pay for parking, purchase movie tickets, pay tolls, and more. Users activate and authenticate payments with their Visa account using biometric authentication (voice and touchscreen commands), which helps in eliminating driver distractions.
Adoption
Factors such as consumer adoption and ubiquity will play a key role in determining the success of the in-car payments concept. In-vehicle payments address some pain points for consumers in paying for fuel and parking and come with additional functionalities and personalised experiences.
As TNS’ Consumers Confirm Smart Payments Adoption report shows, in the US, the UK and Australia, consumers are whiling to use smart payment technologies and Internet of Thing (IoT) based devices, including voice assistants, Wi-Fi refrigerators, and connected cars. 57% of respondents declare that they would be willing to make a payment via a connected car if they owned one. The US consumers are the most eager to own a connected car with payments capabilities, if the car is not too expensive.
Advantages and use cases
Besides paying at the pump, three use cases are particularly interesting as they provide multiple benefits for users and communities alike:
Security concerns
Nevertheless, safety experts believe that voice-activated systems may distract drivers, as these systems take the driver’s mind off the road. Research carried out by David Strayer, neuroscientist at the University of Utah, revealed that talking on the phone while driving creates the same level of crash risk as someone with 0.08 blood-alcohol level. Moreover, speech-to-text technology causes a higher level of cognitive distraction than any other activities since more effort is required to talk to the dashboard than talking to a real person. The neuroscientist claims that a driver needs up to 27 seconds to regain complete attention after using voice assistants.
The road ahead
As the advantages of in-car payment systems seem to far outweigh the disadvantages, the payments for the car industry is something we should definitely keep an eye on, as the future of this space looks promising. With the development of self-driving cars, it is obvious that new use cases and services will emerge. One could actually say that we are even farther than the envisioned car of the future of the previous century. Still, to what extent drivers will be able to use their car as a payment tool or for other types of services is something that only the future will tell.
This editorial was first published in our Payment Methods Report 2019 – Innovations in the Way We Pay, which provides a comprehensive overview of the up-to-the-minute trends, updates, and innovations in the payments space worldwide, depicting the key developments in the way people pay.
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