Originally published on the Infopulse blog.
Customer experience is becoming a major selling point for brands across industries. Consumers are on board as well with 67% of B2C buyers admitting that they are ready to pay a higher price for a better experience. “Comfort”, “convenience”, “efficiency” and “safety” — are old-time favorite marketing pitches used by automakers. But in 2019, it’s time to add “connectivity” to the mix.
The market for connected vehicles is expanding at a rapid pace. And as 5G is making its way to the status of “commodity technology”, even more customers will opt for a “smart” driving experience. Savvy manufacturers are already pivoting with advanced infotainment systems offering a vast selection of safety, driving assistance and app integration features. In-car payments are among the newer HMI trends in automotive. Albeit, this trend has a high chance of becoming the most prominent and profitable one within the next several years.
Why Automakers Rush to Implement In-Car Payment Systems
In-car payment technology is nothing new per se. Payment functionality can be enabled with the help of either:
- long-range radio frequency identification (RFID) tags that can send payment data over the air.
- Embedded BLE hardware modules that can transmit data at a higher range than NFC protocols used by most mobile payment apps.
Development of such in-car payment system can be relatively fast with the right development team on board, and the implementation tradeoffs can be massive. The Digital Drive Report 2019, published by PYMNTS, estimates that commuters are already spending $212 billion a year conducting commerce in their cars. What’s more important though is that 66% of commuters, who are currently using their smartphones for purchases, state they would shop more frequently if in-car purchasing integrations and payments were available.
Taking a closer look at the common activities performed during commute suggests that OEMs have plenty of room for seamlessly “inserting themselves” into the drivers’ shopping experience:
Today, 99 million connected commuters in the US are spending approximately $62.3 billion on gas, $16.7 billion on coffee, $43.9 billion on groceries, $47.2 billion on food and $5.8 billion on parking, yet most OEMs are still missing out on getting a share of these revenues.
While many of the above activities can be performed via voice commands on your smartphone, others cannot. For example, ordering food or drink with a smartphone while driving still means it must be paid for upon pick-up. If items are ordered for delivery, there are manual payment processes that must be completed on that phone — not the safest activity while driving.
The idea of having a payment app embedded in a dashboard and not dependent on a phone or a charge is certainly appealing, especially when a payment method is already connected to the system and can be easily voice- or tap-activated.
All in all, it is now estimated that the in-car payment integration has a revenue potential of $230 billion.
The Most Common In-car Payment Use Cases and Their Business Value
In-car payment systems are definitely upon us. Some proactive OEM’s and auto manufacturers are already taking action to gain a competitive edge. Honda recently collaborated with Visa and developed a prototype for an in-vehicle payment app. New GM vehicles are also coming equipped with payment technology and even an in-dash goods and services marketplace. Last year the company expanded its in-car fuel payment services to the majority of pump stations in the US. Hyundai is partnering with Xevo to develop a connected car experience with a payment component that will give drivers the ability to pay for gas, parking and other goods/services.
Clearly, the race for a more comprehensive in-car payment is on and OEM’s and auto manufacturers best take heed. Below are several viable consumer solutions worth exploring in this regard.
1. Pay-at-the-Pump
Jaguar, GM, Hyundai are just some among several automotives which have successfully negotiated partnership deals with the gas stations to offer better auto payment experience at the fuel pumps. And as more stations are getting upgraded with connectivity, the pay-at-the-pump experience can change even more drastically.
For example, drivers will receive a notification when fuel is running low. Geofencing will then notify them of connected pumps in close proximity. The person can then compare prices and make a selection. While the gas will not be pumped for them, there will be no insertion of a debit or credit card (which has traditionally been a security issue). Rather, the customer will make a payment through the dashboard and be on his way.
From a technological perspective, here’s how such setup can function:
- The driver fills the car.
- The driver’s IVI system then communicates with the pump over a secure wireless connection that provides authentication.
- Once the driver finishes, the car automatically transfers money to the gas station, via the internet, RFID tag or Bluetooth connection.
All of this will require application development software such as those used in the existing mobile platforms. The pump already includes both hardware and software for payment terminals, and an embedded operating system. Software modifications for in-car payment technology should not be a huge challenge.
2. Voice Shopping
Commuters are already calling in on the voice assistants regularly. Moreover, they are actually ready to use them more frequently:
Integrating these apps into any auto dashboard would certainly be an opportunity for more profits to be made. But it’s not the only way OEMs can bank on voice commerce. Instead of sharing profits with 3rd parties, automakers can effectively retain them by offering proprietary voice assistants embedded in the dashboard.
3. Smart Parking
One of the biggest motivators for commuters to push for high-speed rail systems in their communities is the issue of parking. But Americans also love their cars and the independence they give. Most urban areas, of course, have fee-based parking lots, but whether for work or events, parking is always an issue. Connected cars and payment features will ease these issues for drivers. IoT-powered parking lots can “broadcast” open spaces as well as pricing via over-the-air transmission. Drivers can easily navigate to an open spot and pay automatically — no tickets, no cash or cards, and no parking lot attendants.
The following video illustrates how an in-vehicle payment technology will function in this case:
Infopulse also created Smart Parking solutions leveraging IoT and Computer Vision. Discover how they work in this detailed success story.
Continue reading this post on the Infopulse blog where it’s been originally published.
