We will reach a point where in-car payments become second nature, writes David Palmer, CPO and Co-Founder of Pairpoint
The automotive industry is always in a never-ending transformation cycle. Recently, a key focus area has been the advances in connectivity and the integration of in-car payment technology. Basically, we’re talking about a new payment method between any vehicle equipped with the technology and a mobility service provider, public or private, activated autonomously by the vehicle if a predefined set of conditions occurs. With that solution, services such as EV charging, fuelling, parking and others become automated. This technology promises to make transactions simple, fast, and accessible, transforming the way drivers interact with their vehicles and the road.
There are two types of technologies for in-car payments: the first is vehicle-centred technologies, which include, for example, embedded SIM technology, car hardware, image processing and vehicle data. The second is over-the-top e-commerce facilitated through in-vehicle operating systems like Apple CarPlay, Android Auto, and Google Play, which have the potential to bypass the Auto OEM entirely. Key components, including biometrics, blockchain, AI-driven authentication, NFC, and enhanced connectivity, are set to create a secure and fluid experience.
With features like SIM-based secure vaults and vehicle identification, drivers can expect a new level of security that protects transactions while simplifying the process using existing hardware. This in-car payment functionality has the potential to bridge the gap between car and merchant ecosystems, creating a dynamic digital customer relationship management tool for OEMs and providing the ingredients for new business models. Ultimately, this technology could replace traditional cards and mobile apps in the automotive context, making the driving experience as seamless as possible.
A recent report by STL Partners, ‘Fuelling the future: the $580 billion in-car payment opportunity’, highlights the potential of this emerging market, which is anticipated to exceed $580 billion globally by 2030 with a huge annual growth rate of 130% from 2023. This study reveals not only the scale of the opportunity but also the pivotal role in-car payments will play in creating an automotive experience that is safer, faster, and more integrated than ever before.
The report further suggests that payments for automotive-related services (particularly EV charging, fuelling, and parking) will make up about 70% of the market share. The remaining portion includes e-commerce opportunities for services such as food, beverages, and entertainment, while additional convenience features make up the balance. This integrated ecosystem of services aims to transform the driving experience by effortlessly incorporating transactions into the journey, perfectly timed and tailored to meet the driver’s specific needs.
Given this context, in-car payments are poised to become the leading payment technology within the mobility network, driving value creation and fostering new business models. Over the next five years, their adoption is expected to accelerate rapidly, driven by substantial technological advances. However, achieving the full potential of a robust in-car payment ecosystem will require extensive collaboration across multiple sectors.
This means that the success of this technology relies on its ecosystem and the collaboration between the automotive industry and telecommunications operators. The automotive industry, telecom operators, and technology providers will need to work together to develop a secure, resilient system. That will reduce transaction risks, providing drivers with the confidence needed to adopt and rely on these new capabilities. A key objective for stakeholders is to develop a robust network of partners, creating a solution that integrates automotive technology seamlessly with logistics and payment solutions to allow for smooth, secure in-car transactions.
The ultimate aim is for in-car payments to become second nature, seamlessly integrated into the driving experience, as familiar as turning on the engine. Connectivity will serve as the foundation, allowing vehicles to interact seamlessly with their surroundings. By embedding native payment capabilities, the industry is moving toward a future where transactions are instantaneous, allowing drivers to focus on the road and less on the logistics of daily life.
With the global connected vehicle market expected to grow to 895 million vehicles by 2030, the potential for in-car payments to become a cornerstone of this ecosystem is clear. This market will not only enhance driving experience but will also provide substantial new revenue streams for stakeholders, solidifying the automotive sector’s role in the rapidly expanding Internet of Things (IoT) landscape.
In conclusion, the big question is what’s next? The future is an ecosystem-driven, technology-enabled experience where drivers are empowered, and transactions are integrated seamlessly into the journey. This is more than just an opportunity for growth – this marks the beginning of a new era in automotive innovation and IoT.
David Palmer is a digital visionary, innovator and author. He is the Chief Product Officer and Co-Founder of Pairpoint, and one of the leaders in blockchain and metaverse technology. David is a recognised thought leader in blockchain, Web3 and the application of these technologies to telecoms and wider enterprise business.
Author: David Palmer, CPO and Co-Founder of Pairpoint
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