Car manufacturers continue to develop connected consumer experiences, opening up new revenue streams and opportunities to improve the customer experience.
For drivers, the ability to make payments for anything from parking, tolls, fuel and food on the go to roadside assistance, directly from the vehicle dashboard, provides a speed and convenience turbo boost that could significantly increase brand loyalty.
Payment options can also tap into current issues such as the rising cost of living. For example, if a customer has a flat tire and needs roadside assistance but can't afford to pay for one upfront, providing buy now, pay later (BNPL) solutions as a roadside payments solution could boost subscription-related services and foster customer loyalty.
This innovative approach not only offers immediate financial relief to customers in unexpected situations but also presents an additional untapped revenue stream for car manufacturers, diversifying their service offerings.
As more service providers expand their payment ecosystem to include in-car platforms, the value of in-car payments will continue to grow and could reach $86 billion by 2025, up from $543 million in 2020, according to Juniper Research.
Automakers can seize the opportunity to drive revenue growth and foster long-term business sustainability, thus becoming active players in the digital economy.
If the connected car payment industry is to reach its potential, however, manufacturers will have to overcome a number of hurdles. These include the lack of sufficient payment specialists in the automotive space; finding the right financial ecosystem partners; and pinpointing use cases that truly enhance the customer experience – beyond the obvious, like paying for tolls and gas.
For example, paying for fast food, groceries and scheduling and paying for car maintenance are all potential applications for in-car systems. Further, using data and AI technology, connected systems could suggest relevant goods and services, anticipate drivers' needs, and shed light on desires they didn't even know they had, providing a true open road experience.
While deals such as Parkopedia's recent collaboration with electric vehicle charging company Plugsurfing gives drivers the ability to park and pay using Parkopedia's in-car payment platform, are becoming more common, car manufacturers may want to build their own in-car systems to empower dealerships and more directly manage the impact the experience has on customer loyalty.
Building an operating system from scratch, the approach being adopted by Mercedes-Benz, for example, is an enormous investment and the ecosystem is a complicated and expensive one to navigate.
There are multiple hurdles to overcome including compliance with payment regulations and the security of sensitive customer information.
Understanding consumers' needs will help manufacturers shape their offerings accordingly and create sensible subscription models that lead them to their endgame.
A choice to make
Differentiating your connected system requires overcoming several nuanced, technical aspects beyond building or outsourcing.
Keeping the customer as the focal point and devising a holistic approach to payments that enables access to a strong network of partners is crucial.
When it comes to the secure and seamless protection, storage and analysis of customer transaction data, for example, the right partner can accelerate the journey to full connectivity and overcome technical and regulatory hurdles such as data encryption and privacy laws, breach prevention measures and adherence to industry-specific regulations.
Keeping the future customer journey as the focus of will ensure that in-car payment solutions open new digital doors for customers. Partnering will get many players there quicker and deliver a consistent digital payment experience across brands and vehicles, increasing adoption, decreasing confusion and making it easier to onboard new merchants as the retail ecosystem expands.