It’s the car industry’s turn to embrace digital payment systems

December 2018

Imagine not having to pay cash or by card when you pull up at a gas station. You can now pay with your own car.

According to a Visa and PYMNTS report , the 135 million US commuters spend more than USD 210 billion a year on gas, parking, food, coffee and groceries as part of their drive to and from work. Purchasing goods and services directly from or adjacent to the car, as fast and seamless as possible, is something consumers have started to expect.

Nowadays, the automobile industry is collaborating with card networks and retailers in order to equip vehicles with in-car payment systems. Therefore, the car simply becomes a wallet and drivers don’t need to get out of the vehicle to pay for gasoline, parking spaces and more.

Generally, modern cars include an in-vehicle infotainment (IVI) system. This system usually combines multimedia, navigation, radio and telephony functions. Apple Pay, Android Pay or Samsung Pay, in combination with Near Field Communication (NFC) or Bluetooth Low Energy (BLE) peripheral hardware and techniques like Host Card Emulation (HCE) and QR codes, allow a mobile to be used as a payment device.

The in-car payments race begun in 2015, when Shell launched a mobile payment service, the Fill Up & Go mobile payment system. Working with Apple Pay, Android Pay and PayPal, the technology enables the use of PayPal to pay for fuel through a smartphone at the gas station.

Then, in 2016, Mastercard partnered with General Motors and IBM to integrate payments into OnStar Go, an AI-powered version of GM’s OnStar system. This new system allows drivers/passengers to make payments for goods and services using credit and debit cards within their Masterpass wallet.

Dubbed as the “world’s first in-car payment system”, launched in February 2017, the payments system developed by Jaguar and Shell allows drivers to fill up the vehicle and go as the car pays for the fuel. An electronic receipt is displayed once the payment is completed and is sent to the driver’s email address.

Afterwards, in January 2018, Honda revealed at Consumer Electronics Show that it was conducting “the first proof-of-concept demonstration of in-car payments” for parking and fuel. The demo was part of Honda's ongoing partnership with Visa. Both companies wanted to install beacons that communicate with a Honda via Bluetooth in order to complete payments through a Visa Checkout integration.

In May this year, Hyundai announced a plan to work on an in-car credit card payment service that enables drivers to find and pay for coffee, gas and parking from their infotainment screen. In April, Chevrolet teamed up with Shell to launch a similar payments feature that allows drivers to pay for gas from their vehicle’s infotainment screen. It is the latest feature of General Motors’ new Marketplace service in which owners can pre-purchase coffee and gas or make restaurant reservations from the driver's seat.

Finally, in July 2018, Hyundai Motor America partnered with Xevo to demonstrate an in-car payment concept that would allow drivers to pay for gas, coffee, food and parking without leaving the vehicle. Chevron, Texaco, ParkWhiz and Applebee’s have already signed on as merchants for this new payment concept. The system goes beyond credit and debit, allowing other options (such as gift cards) to be incorporated.

All in all, the payments for the car industry is something we should definitely keep an eye on, as the future of this space looks promising. And to what extent drivers will be able to use their car as a payment tool is something that only the future will tell.