Not so long ago, cars have simply been a means of transport. But with the new innovations in connectivity tech, car manufacturers have grown to offer the ability to pay for gas, parking and food right from your car’s dashboard. Read this article for the latest developments in the world of in-car commerce.
Hyundai just announced rolling out in-car payments, letting its customers pay on the go at the comfort of their own car. This exciting launch might be just the next step towards making in-car payments mainstream.
Payment giants such as Visa, MasterCard and PayPal clearly recognized the potential of in-car payments and have been partnering with automakers to develop and integrate this new technology.
In-car payments are taking off, and according to industry reports, the market size of global in-vehicle payments is expected to undergo explosive growth by 2027.
The food and coffee ordering segment accounted for the largest revenue share for in-car payments. People often choose to go to drive thru’s for the convenience, but... the long lines defeat the purpose of a to-go meal. However, the ability to order and pay via your car’s dashboard cuts down waiting time significantly.
The second largest use case of in-car payments is purchasing gas. This is not so surprising, especially considering that stepping out of your warm car on a cold rainy day just to pay for fuel, is highly inconvenient. Car makers however, offer very attractive solutions.
Visa and Honda for instance demonstrated a new in-vehicle payment system. Honda drivers will be alerted when they pull up to a beacon-equipped fuel pump, and they can simply pay by touching a button on their dashboard.
If we look at the current developments in the world of payments, we can clearly see that the direct to consumer service model is on the rise, and that Hyundai is one of the first car manufacturers to adopt this model.
The conversation about innovative payments technologies always circles back to tokenization. As we mentioned in an earlier episode of 'All About Payments', tokenization is a hot topic in the payments landscape as it is key to minimizing friction and thus boosting checkout optimization.
By leveraging tokenization, in-car payments become convenient and frictionless as they only require you to fill in your payment details just once.
If you would like to leverage tokenization into your payments architecture, sign up for a free consultation.
Soon enough, we believe that in-car payments will become a feature customers expect to see in their vehicle, and one that may even influence their purchasing decisions. So far, BMW, Daimler, and Jaguar seem to be the largest automotive manufacturers who already offer in-car payment features.
New players who plan on entering the space need to follow best practices such as finding the right partner and developments to fit the customer journey.
To conclude, not only do in-car payments open up a new revenue stream for merchants and car manufacturers, it also largely influences customer loyalty. We certainly think that this service will become the new norm, but the question is, when will we truly see in-car payments become mainstream?
2021 has been a year full of change, and as consumers continue to gravitate towards online shopping, businesses are also transforming to meet the demand for convenience and frictionless digital payments for businesses and consumers.
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