Alternative payments have made their way into just about every facet of society, and now vehicles can be added to the list. In-vehicle payment solutions are increasingly being added into the dashboards of cars and trucks, so that the consumers get the convenience they are used to in their everyday lives on the road. Rather than having to pay with a smartphone or credit card, the vehicle connects with a driver’s bank card, for instance, and completes the payment automatically.
The opportunity is vast. Drivers are increasingly relying on voice-activated assistants while behind the wheel, whether to locate the nearest gas station or coffee shop. According to PYMNTS.com, commuters use the drive-thru for their coffee purchases an average of 65 times per year.
Drivers with internet payment capabilities are big spenders, doling out more than $62 billion for fuel and nearly $17 billion on coffee last year. So adding payment technology to vehicles to capitalize on the opportunity and accelerate the payment process is the next logical step.
The technology is already here. Today’s vehicles usually offer an in-vehicle infotainment system, which connects with navigation and other features. Operating systems used in vehicles mirror the technology used to make smartphones and apps such as “Apple Pay, Google Pay, Samsung Pay,” and more.
As a result, it’s not too much of a stretch for vehicles to resemble a giant smartphone for payments, as long as the provider on the other side of the payment, such as a gas station or toll collector, has the technology to accept it.
Culture Shift for OEMs
Payment providers, including the likes of Visa, have begun to look at the market opportunity in a more holistic fashion. Their overall goal is now becoming even more integrated into the lives of their customers: from home to vehicle, to the retailer, and more.
But to do this, auto manufacturers must remain nimble and open to adjusting their corporate culture. For instance, payments technology is comprised of several moving parts across “security, authentication, logistics,” and more. No one company can really do it alone, which means that auto manufacturers must be open to working with partners they might not otherwise have considered, that is if they want to become a first-mover.
This trend has already begun to take shape in countries like China, where Tencent recently strengthened its partnership with carmaker GAC. In that deal, state-owned GAC gained access to Tencent’s tech muscle across the Internet, payments, cloud technology, and messaging.
In recent weeks, Visa and satellite radio giant SiriusXM have teamed up for an in-vehicle payment solution venture that lets users pay, or even prepay, for their coffee, right from the dashboard. The tech involves a dashboard-integrated e-wallet in vehicles with SiriusXM. For driver security, the system responds to voice and touchscreen commands, so that the driver can keep their hands on the wheel.
Automaker Honda, meanwhile, has partnered with Visa for Dream Drive, which is a driver and passenger infotainment system. The system features a mobile-based dashboard that supports in-vehicle payments across fuel, movie tickets, parking, food ordering and more. Now Honda has plans to widen its in-vehicle payment by offering to support Mastercard and PayPal.
Pros and Cons
The design of in-vehicle payment solutions is meant to be intuitive, often integrated into the dashboard and activated by voice or touch. It removes the need to dig for cash or even a smartphone, which saves time and supports safe driving. When paying for a service such as fueling up, for instance, the driver doesn’t have to worry about security risks like identity theft or credit card skimming that can happen with traditional credit cards.
Nonetheless, similar to smartphones, there is a risk that the driver could become distracted with the option to order and pay for food or a parking spot. The other less dangerous threat is simply spending more money than a budget allows because in-car payments make it easier to do so.
In-vehicle payments are only the beginning. Technology engineers describe a world in which biometrics is integrated into cars to follow the driver’s eye. The tech then responds based on where the eye is focused and communicates any upcoming traffic or other issues in that line of sight. It can even tell if the driver is falling asleep.