In-Car Payments Set to Explode With Autonomous Adoption

The opportunities for in-car payments and revenue streams are extensive but will depend on a comprehensive network of partnerships between financial institutions, commercial businesses and the carmakers themselves.

More than anything, to truly reap the potential benefits, all players will have to focus on providing drivers, or passengers, with secure and seamless payment methods that use advanced technologies including artificial intelligence and infotainment integration to anticipate their upcoming needs. Both Visa and Mastercard have begun building a road map to those ends, forming partnerships with automakers and gas stations to expand and accelerate reward programs.

In March, for example, Visa and Honda announced a proof-of-concept connected car that it easier to pay for things, like gas and parking. The technology allows consumers to pay through two in-car apps, each developed alongside infrastructure partners Gilbarco Veeder-Root, a technology gas station developer and the IPS Group, a maker of wireless payment solutions for parking meters.

Back in 2016, Mastercard partnered with General Motors and IBM to integrate payments into OnStar Go, an AI-powered version of the system. The credit card company has also made several strategic partnerships to build out its in-car payments experiences.

Bill Versen, chief product officer at Transaction Network Services, said: “As payments cards take on an increasing number of forms, including wearables and IoT devices, our personal vehicles represent the next step to extend card-on-file and cloud payments. With increased technological capabilities, OEMs have the potential to recommend services which are contextually relevant to consumers while traveling.”

Versen noted payment security and consumer privacy have to be the two pillars by which this payment factor is enabled. “Luckily, despite many regions of the world having technology differences, there is universal expectations that we keep consumer data private and payment data secure,” he said.

In the EU, which has a more uniform regulatory regime in the shape of GDPR, enablers of commerce can apply standards adaptable to 27 countries. “When developing in-car payments the most pressing concerns are where the data is to be stored, such as in the in-car system or cloud, and who will have access to it,” he explained. “This data can also provide useful insights and be repurposed to provide for better end user experiences.”

From the security standpoints the typical in-car payment system is somewhat like a mobile one. There are threats connected with any wireless mobile payment system and protocols such as malware, transmission channel security vulnerabilities, data breaches, and so on.

These payment systems can be protected with techniques and approaches quite similar to mobile security systems, such as multi-factor authentication, data breach prevention and fraud detection and prevention.

Ihor Starepravo, vice-president of delivery, automotive at Intellias, noted based on the swift developments in driver monitoring systems (DMS), there will soon be systems that allow the vehicle to recognize its owner, making multi-factor authentication very intuitive for the user. “Some automakers are still struggling with proper data safeguards connected with the lack of over-the-air updates functionality,” he explained. “Yet the situation is improving over the last couple of years and, within the next 2-3 years, we should expect new generation of automotive grade application platforms emerging in the market.”

Versa explained connected car technology also has the ability to connect with secure commerce opportunities at the pump, where consumers can pay for not only fuel but also groceries, fast food and other convenience store items from their dashboard or interactive pump touchscreen.

Versen said the future of in-car payments will be seamless, with the payments experience integrated to the point that it will be invisible. “Today’s day-in-the-life in-car experience will be nothing like the future,” he said. “Gone will be the need for having to individually set up your payment source with a retailer or type of service. Your car will automatically be able to recognize which credit card is used to gain loyalty points for gas, which will be different than how you pay for your items at Target.”

Starepravo pointed out current development of in-car payments enables number of new use cases that are lucrative enough for key industry players. “Yet, the true power of in-car payment and strong kick to the economy will come in place with proliferation of M2M payments, where the car (or better to say the on-board artificial intelligence) becomes an active economic actor,” he said.

He predicted that, similar to navigation, in-car digital shopping experience with an integrated payment system will overtake mobile apps owing to providing more natural experience, taking all context and safety considerations. “When Level4+ autonomy emerges and proliferates through the market, in-car payments will leap forward,” he concluded.

Connected Vehicles