Vroom, Vroom: Vehicles Accelerate the Future for Payments

By Scott Blum, Total Merchant Services

As the Internet becomes ubiquitous, consumers could someday pay for gas, parking, food and tolls from their cars without using credit cards or even stepping out of their vehicles. Car companies increasingly are betting that such transactions will gain importance for consumers. A glimpse of that future comes from the following projects:

• At the 2017 Consumer Electronics Show in Las Vegas in January, Honda introduced an in-vehicle payments system that lets drivers pay for gas and parking simply by pushing a button in their cars. The technology provides notifications to drivers when they can make payments from meters or pumps, and the drivers can make the payments without leaving their cars.

• Mastercard is including its Masterpass mobile payment technology into a new platform called OnStar Go and is working with General Motors and IBM to implement the system. The vision for the combination is to allow drivers to order and pay for food, goods and services, as well as perform other functions. The feature will be included with many GM vehicles this year.

• Mercedes announced in January that it’s acquiring electronic payment services provider PayCash Europe and plans to use it to launch “Mercedes pay” in its Daimler Mobility Services subsidiary. Mercedes said customers will be able to use Mercedes pay to purchase company services using their smartphones. It also plans to use the new payment system to facilitate vehicle-financing transactions.

• Jaguar is partnering with Shell to launch a new payment feature that lets drivers use Apple Pay or PayPal (with Android Pay coming later on) to pay for gas right within their vehicles while at the pumps.

• Volkswagen announced that its financial services arm purchased PayByPhone, a mobile payments company with a smartphone app that allows users to pay for parking and parking tickets.

• Ford recently announced that it will add Amazon’s Alexa digital voice assistant to its vehicles. John Scumniotales, general manager of Amazon Alexa Automotive, noted that users will be able to order food and send flowers using the voice-controlled Alexa.
• Google is reportedly working with Hyundai to bring its Google Assistant to the South Korean automaker’s cars. Google’s voice assistant does not yet allow payments, but the tech firm is rumored to be developing this capability.

Clearly, the carmakers, technology companies and payment processors think that having payment solutions integrated within automobiles provides several advantages for their customers. The potential benefits are numerous. A driver in a car rental could buy insurance, activate navigation or order other value-added services directly from the car. A family could order food from their car and make the payment without fumbling for a wallet. Parking garages can be simplified, with payments made directly from the car upon exiting the garage. Drivers can simply drive by a toll booth and have the payment automatically debited from their accounts. In addition, rewards programs that are associated directly with in-car payments could materialize, pushing drivers to specific vendors and creating new revenue streams for car manufacturers.

There are still many hurdles that need to be overcome before mobile payment systems in cars become commonplace and ubiquitous. It’s a bit similar to the problem that exists with NFC payments and mobile wallets at retailers —the “acceptance” component has to be built out before the payments can actually be made. In other words, parking garages, toll booths, restaurants, gas stations and other points of payment “on the road” need to be connected to accept payments from automobiles for the technology to be truly useful.

With trials underway, the process is starting. If consumers see benefits from these trials, which is likely, then in-car payment acceptance will continue to rise. We are betting that will be the case.

Scott Blum leads marketing, business development, and integrated payments for Total Merchant Services. He has served in a variety of executive leadership roles for financial technology companies, including chief marketing officer for CAN Capital and director of marketing and global payments for Intuit. He can be reached at [email protected].

In Viewpoints, payments professionals share their perspectives on the industry. Paybefore presents many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.