Driving towards in-car payments

One of the areas gaining considerable attention in the automotive industry is in-car payments. Many industry observers categorize potential applications into three main use cases, each offering a unique avenue for innovation:

• Functions-on-Demand: In-vehicle payments for additional software upgrades within post-vehicle delivery. Examples include comfort and driving features that users can enhance through easy transactions.

• Vehicle-Related Payments: In-vehicle payments for running and maintenance costs during ownership. Covers expenses such as servicing, fueling and charging, fast-tracking the payment process for routine vehicle-related needs.

• Non-Vehicle Related Shopping: Focuses on purchases made from inside the car but for goods and services unrelated to the vehicle. Aims to monetize passengers' passive time in vehicles, transforming the car into a mobile e-commerce unit.

The mobile phone provides a convenient and well-established tool for so many use cases still, that it is a real challenge for car manufacturers to create in-car applications that are compelling enough to make users switch to interact with the car as a device. 

For obvious reasons, payment solutions are not suitable for while vehicles are in motion unless it’s a passenger making the transaction, and this will drive use cases. There are still compelling services to be created for drivers, such as locating, booking, and paying for parking at planned destinations before you set out, or booking and paying for breakdown services with crucial car diagnostics going to the provider before arrival.

In the not-very-distant future, however, autonomous driving will allow drivers to divert their attention away from operating the vehicle, and the in-car experience will really lend itself to a range of tasks such as entertainment, conference calling, and shopping. This will make more effective use of the large screen dashboards we see already in new cars, turning the car into a much more attractive device than the mobile phone. 

This vision extends to cars becoming your AI bot when driving, interfacing with other systems to enhance your experience. From suggesting public transport connections to planning and booking services, even giving options based on, say, cost or location, predictive analytics will likely play a pivotal role in opening doors for in-car payments. 

As a sign of the nascency of car-related payments, one only needs to observe the different approaches car manufacturers are currently taking. Some are collaborating with proven solutions, such as Volvo bringing the well-established Google Android OS into the car. Others are developing proprietary solutions, like Mercedes Benz with their own operating system in MB.OS. Some have yet to put a stake in the ground at all.

Whether the future is proprietary solutions tied to a specific OEM, or deployment of technology and interfaces we know from other devices, there is definitely a need for collaboration to deliver the best services to consumers. Connecting card networks to in-car payments, like Mercedes is linking Mastercard accounts to the dashboard-based interface, are obvious partnerships to take advantage of users’ existing payment options. We also see fintechs and banks getting involved, an example here is offering real-time BNPL options for unexpected high-ticket items, such as a new car battery (perhaps delivered as part of the breakdown assistance). 

As the automotive industry embraces these advancements, collaboration, and innovative partnerships will be the key drivers in delivering seamless and enriched in-car payment experiences to consumers.