In-Vehicle Payment Systems: An Innovative Collaboration of FinTech and Automotive Industries
With the ultimate goal of making transportation safer, more convenient, and more sustainable for consumers, the automotive and mobility industry is rapidly integrating all kinds of advanced technology into vehicles.
Today, all the latest technologies, including artificial intelligence (AI), robotics, the Internet of Things (IoT), advanced batteries, and many more, can be found in one single product.?
In-vehicle payments are one such example of technical innovation that is gaining enormous popularity among consumers due to the advantages it provides to digital payment technology. It enables vehicle owners to buy goods and services from the vehicle without any payment equipment.
The in-vehicle payment system is a piece of payment technology for automobiles. The drivers can use this system to pay or transact with a variety of businesses or applications, including gas/charging stations, parking, restaurants and bars, and toll gates.
The solution also makes it possible for customers to buy things right from the dashboard of their cars, which saves time and makes the procedure of automotive payment more convenient. Therefore, the adoption of in-car payment services is being driven by the growing public desire for prompt and effective contactless transactions.
The growing cashless economy has already led to the emergence of a new industry called financial technology (FinTech), which, as suggested by its name, is the integration of technology into financial services.
The emergence of FinTech has led to the large-scale adoption of payment gateways via devices such as smartphones and laptops. The direct integration of this technology into vehicles is only meant to enhance the convenience, safety, and experience of the consumers.
Moreover, the focus of automakers has shifted to integrating the in-vehicle payment system into their next models because of the recent spike in the use of automotive payment services throughout developed nations and their expanding global awareness.
For instance, renowned automakers, including Honda, General Motors (GM), Mercedes, and others, have started to provide payment services recently. In the upcoming years, growth in the in-vehicle payments industry is anticipated as a result of original equipment manufacturers' (OEMs) shift in focus toward creating in-car payment systems.
According to the BIS Research report, the global in-vehicle payments market is projected to reach $25.91 billion by 2031 from $4.90 billion in 2021, growing at a CAGR of 18.15% during the forecast period 2022-2031.?
In this article, let’s understand in what ways in-vehicle payment systems can enhance the consumer experience by increasing payment convenience.
Most Common Applications of In-Vehicle Payment Systems
The following are several viable consumer solutions worth exploring in this regard.
1.??????In-vehicle payment system for smart parking: Parking is always a problem, whether for work or an event, despite the fact that the majority of urban areas have fee-based parking lots. Drivers will benefit from connected automobiles and in-vehicle payment options. IoT-powered parking lots can "broadcast" available spaces and prices over the air. Without tickets, cash, credit cards, or parking lot workers, drivers may quickly maneuver into an open place and make the payment automatically. An intelligent parking system with in-vehicle payments is being introduced by automobile OEMs and manufacturers using IoT.
This device allows customers to view nearby parking lots via an infotainment app and the status of their parking spot in real-time using cloud computing. Additionally, the application gives the user the option to book a space in that parking location in advance if one is available. The parking fee is automatically taken from the wallet, in this case, using radio-frequency Identification (RFID) technology. Through online payment, the wallet can be topped out.
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2.??????In-vehicle payment system for gas/charging stations: To improve the experience of making an automotive payment at the pump, a few automakers, including Jaguar, GM, and Hyundai, have successfully established partnerships with gas/charging stations. The pay-at-the-pump experience may also change considerably as more stations connect. For instance, drivers will receive a notification when their fuel is low. Then, geofencing will notify them of any linked pumps nearby.
The person can then evaluate prices and make a choice. No debit or credit cards will be accepted for them, and no petrol will be pumped for them (which has traditionally been a security issue). Customers will instead pay through the dashboard and continue their journey.
3.??????In-vehicle payment system for food and beverages: Customers who participate in a restaurant's loyalty program can connect their automobile to their reward account. From the infotainment screen in their car, customers may access saved payment information, preferences, and order history. They can set up accounts for companies whose products they have not yet tried. Customers may get their morning coffee, order "the usual," from their favorite burger spot, or book a table at their preferred Friday night hangout from the comfort of their automobile after their accounts are linked.
In order to provide customers with cutting-edge new technological solutions for in-vehicle ordering and payment, automakers and technology companies are working together. The infotainment system in a person's car may be used to order preferred dishes and beverages, as well as make dinner reservations, making it easier for restaurant companies to reach their target market.
If restaurants had a dynamic means to interact directly with customers from their cars, operators would lower friction points for customers and enhance direct contact. Incentives for opening an account or placing an order are another way that brands can encourage individuals to use technology and explore new brands. This encourages the usage of loyalty programs, enhances current customer relationships while also fostering new ones, and ultimately boosts income.
4.??????In-vehicle payment system for toll collection: It has always been challenging to finance toll roads. However, there is also room for a great improvement in this procedure. In a vehicle's license plate and windscreen label, there may be embedded proofs of authentication and payment mechanisms. One can automatically read those that enter the paid road due to long-range radio frequency identification. The associated account of the driver will automatically be debited for the toll.
For instance, the integration of their platforms, which would automate toll payments for millions of drivers in the U.S., was announced in May 2022 by Parkopedia, a major provider of connected vehicle services, and upload, a top mobile tolling payment system.
Through the integration of Parkopedia's in-car payment platform and the digital toll payment system, which does away with the necessity for a tolling transponder, the collaboration makes it possible to access tollways. To enable license plate recognition, it identifies the car each time it goes through a toll booth and starts the automated payments drivers expect from their connected vehicles. Drivers just need to register once. Transparency in the transaction is made possible by the driver receiving notifications for each event in real time.
Conclusion
Moving forward, more advanced?and inventive solutions are anticipated to result from the merger of the automotive and FinTech industries. As OEMs scramble to satisfy consumers' demands for enhanced connectivity and convenience, new-generation automobiles are increasingly equipped with sophisticated in-car payment systems. Moreover, the logical next step is in-vehicle payment systems because they improve the driver experience and give manufacturers another revenue stream.
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