‘1-Click’ In-Car Commerce: The Next Big Frontier for the Automotive Industry
In-car payments represent a potential $212 billion business opportunity. All carmakers need to prioritize this development. The connected vehicle can become a digital wallet, opening up exciting possibilities for automakers.
As we’ve talked about before, in-car payments offer numerous advantages for consumers. But they also offer an exciting opportunity for automakers.
Right now, purchasing a car is basically a one-time buy. Automakers are struggling to connect with their customers after they get the vehicle. Since car purchases are handled by dealers, even that is largely out of automakers’ hands.
Even though most drivers spend hours in their car every week, automakers don’t have an ongoing relationship with their customers. What the customer does with their car is essentially a ‘black box’.
However, we do know that drivers are already using the Internet while they’re in the car. About half of drivers use their smartphone to find a gas station while driving.
Many drivers also use their phones to make purchases — -say, coffee or groceries — while driving. And two-thirds of drivers who make mobile purchases say they would do so more often if they could do so directly from their vehicle.
By failing to provide an in-vehicle payment method, automakers are missing out on these transactions. They’re also missing an opportunity to provide major value to their consumers. People are likely to feel more attachment to their cars (and car brands) when the car plays a critical role in all of the business transactions they conduct on a daily basis.
In-car payments will allow automakers to have greater insights into their customers, allowing them to better serve drivers. This is particularly important for purchases that are directly related to driving — like fueling, parking, and tolls. Automakers can learn where their drivers go, how long they stay there, and what services they utilize along the way.
Some companies are already dipping their toes into in-car payments. Jaguar and Shell partnered to provide in-car fuel payment services. Other automakers, fuel companies, and credit card companies are working on their own in-car payment systems. Ideally, drivers should be able to pay for fuel or parking at a wide variety of vendors. Although getting merchants on board may be challenging, the ultimate value is clear.
The idea of everyone paying for gas with in-vehicle payment may seem fanciful. But we’ve already seen major changes in payment methods. Once, debit and credit card payments seemed like an outlandish idea, but they quickly became the norm. More recently, mobile wallets have become ubiquitous. In 2018, the total volume of mobile wallet transactions exceeded $4 billion. By 2022, this figure will reach nearly $14 billion.
Mobile wallets have worked because they offer customers real value. 85% of smartphone users who use mobile payment methods have positive perceptions of the payment method. In-car payments have the potential to be just as successful — if not even more so. Automakers need to make sure they don’t let this opportunity pass them by.
