Adoption of In-Car Payments Set to Accelerate

Automakers are collaborating with technology companies to integrate payment capabilities and corresponding applications directly into in-car technology systems.

Nikhita Hyett

December 29, 2023

3 Min Read
GM Marketplace screenshot
General Motors rolled out Marketplace in-car shopping platform for 2017 model year.

It wasn’t too long ago that the automobile was simply a means of getting from one place to the next. Times have changed. Today’s cars are technology-laden devices that interact and engage with nearly every aspect of our expansive digital lives.

With a wide range of internet-powered integrated applications, vehicle ownership is now as much a digital experience as it is a transportation one. Drivers can access entertainment, navigate, communicate, stay connected via voice or order a meal to be delivered to their destination, all while cruising down the highway.

Today’s cars have so much technology that the number of lines of code embedded within their systems exceeds that of a F-35 fighter jet or commercial airliner.

The presence of all that technology has given rise to another digital transformation quickly gaining speed across the automotive sector: in-car payments. The connected car is becoming the latest form of payment.

Embedded payments are popular across multiple industries, so much so that revenue generated from embedded payments in platforms is expected to surge from $1.9 billion in 2021 to $6.7 billion by 2026. Software platforms, telecommunications providers and logistics companies are just some that have embedded payment technologies into their products and services.

The automotive industry is following suit. Much like our mobile phones and smart watches continue to replace physical credit and debit cards, automakers are collaborating with technology companies to integrate payment capabilities and corresponding applications directly into in-car technology systems.

This past year featured key milestones at the intersection of payments and automotive technology. In September, Hyundai began offering customers the ability to make payments via touchscreens using stored credit card information. They also launched a parking payment service where U.S. drivers can find, book and pay for parking all from inside their vehicle. In the same month, Mercedes-Benz announced a partnership with Mastercard making it possible for drivers to use their cars to pay for fuel at the pump at more than 3,600 service stations in Germany.

Automakers should be highly motivated to introduce in-car payment capabilities. With American drivers spending just over an hour behind the wheel every day in 2022 and driving an average of 30.8 miles (50 km) per day, in-car payments offer another layer of convenience, efficiency and a “cool factor” for the vehicle owner that is bound to enhance brand loyalty in a notoriously competitive industry.

Delivering an intuitive payment experience can ensure customers stay within the automaker’s ecosystem and marketing grasp long after the transaction is completed at the dealership. Instead of routing to a third-party payment provider, in-car payments can open the door to new revenue streams for automakers, making it easier for vehicle owners to seamlessly purchase add-ons, system upgrades or any number of customization options, all of which can be transacted using the embedded system in the vehicle.

Nikhita Hyett - BlueSnap.jpg

Nikhita Hyett - BlueSnap

With 96% percent of newly manufactured cars expected to have built-in connectivity by the end of the decade, a jump from 47% in 2020, the intersection of financial and automotive technology and the emergence of in-car payments is likely to intensify in the year to come. Expect new partnerships and the introduction of innovative solutions that will enable vehicle owners to transact with greater speed, ease and efficiency.  

Nikhita Hyett (pictured, above left) is a managing director at BlueSnap, a global payments technology company and all-in-one payment platform for B2B and B2C companies.

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