Where smartphones lead, cars follow, and that’s the case for in-car payments too.
The currently limited ability to pay for stuff like parking, charging or drive-through food and drink via your car is expected to grow exponentially in the next few years as car companies and other financial-technology providers compete to grab a slice of the market.
The total global market for in-car payment is expected to grow from $3.32 billion (£2.7bn) in 2021 to $12.5bn (£10.2bn) in 2030, according to research by Fortune Business Insights.
Mercedes and its payment partner Visa are even more optimistic, eyeing up a chunk of what they estimate will be an $86bn (£70.4bn) market by as early as 2025.
First though, the car companies have got to jump through a lot of hoops.
“From a technology perspective in-car payment isn't tricky at all. The problem is more the business roadblocks,” said Pedro Pacheco, automotive tech analyst at consultancy Gartner.
For Pacheco, in-car payments or e-wallets are in the still in that optimistic ‘innovation trigger’ phase of what Gartner calls the technology hype cycle. Still to come is the ‘peak of inflated expectations’ and the ‘trough of disappointment’ before heading off to the slope of enlightenment. Five years he gives it.
Examples of those business roadblocks were thrown up during experiments during in-car payments for fuel, for example Shell’s link up with Jaguar via its now superseded InControl screen interface. Because they're limited in terms of number of fuel stations, it has limited appeal.
Mercedes, for example, last year touted its Fuel and Pay service from the dashboard screen for 900 fuel stations in Germany – a country with 14,459 stations in 2019, according to Globaldata.
There was little benefit to fuel companies for widening the scope that scope given that in-car payment could ultimately see them losing custom for attached shops, Pacheco argued.
“This is the biggest issue: to succeed, you need to build a comprehensive holistic ecosystem of places where the end customer can use the e-wallet,” he said.
Portugal’s Via Verde connected network has shown how an ecosystem could work. Originally set up as a way to pay for the country’s toll roads via a tag, Via Verde has evolved into a system to pay for a range services in-vehicle, including even McDonald's take-away via numberplate recognition. Parking, vehicle servicing, ferries and EV charging can all be paid for through the system.
Via Verde is entirely agnostic to car brands, but the brands are trying to develop systems unique to them.
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