25 December 2017


A large number of everyday consumer payments, such as parking, gas, tolls or picking up food at drive-through, are car-related. As consumer needs increase, the payment process starts to enter every aspect of our lives. Until the last 10 years, all of us considered that the only payment method was with a traditional, physical, plastic card. But with new innovations happening in the Internet of Things, a great many new ways of payment are now being implemented, such as “payment in the car”, “payment with wearables”, “payment with connected TV”, and so forth.

Connected cars are one of the most amazing discussion topics of recent times. Today, around 20% of new cars are connected. A connected car combines onboard sensors and Internet connectivity to optimize vehicle operation and maintenance, and to deliver a more convenient and comfortable driver experience. One aspect of the connected car that is increasingly relevant to financial services is telematics: the crossover of telecommunication and informatics, which enables sensors to gather and transform data to be utilized in more accurate risk assessment. Through the vast amounts of data generated by telematics, insurance companies can better identify risk and profile their insured customers.

The car being connected is a great advantage in many different respects, such as providing drivers with more information about the car such as diagnostics, as well as tracing driver behavior and allowing immediate communication with police, hospitals and insurance companies following a car crash, etc. Car OEMs explore the offer of mobility services to their consumers for navigation, payment features, car-sharing and on-demand rides.

Having cars connected may facilitate the payment process, as it enables merchants to know the payment intention of the consumer at the right time. Thanks to location-based services, merchants may know that the consumer is close to their location and also, thanks to data analytics, they may know what the consumer might actually want. It gives merchants a great opportunity to communicate with consumers through car or mobile phone platforms, and to offer their products and personalized campaigns. Consumers may order a product in the car from a nearby merchant and go directly to pick up the order. This is a good scenario, especially for Quick Service Merchants, as most of the time it is a tedious and time-consuming process to find a parking lot, walk to the merchant, and wait in the queue to buy a McDonald’s burger.

Embedding the payment feature in the car may have many benefits. From a perspective of convenience, making payment on the car screen is far easier, more convenient and more secure than making it on the phone. Although mobile phones have more flexibility to deploy and manage applications, using the car screen would be easier for carrying out payments. The ideal solution would be to use Apple Car Play and Android Auto mobile to mirror the mobile phone screen in the car.

From a security perspective, cars may provide a more secure platform than mobile phones, as mobile phones are more vulnerable to fraud than cars. A car may have PCI-enabled hardware embedded in it, whereas it is very difficult and costly to embed such hardware in a mobile phone. Like mobile phones, cars may store customer payment credentials in the Secure Element. It is possible to store multiple-people payment credentials in the car, as it may be used by different people.

From a flexibility perspective, it might be more beneficial for car companies to have their own wallet in which they can implement a great deal of technology without being dependent on any third party.


The ideal shopping process in a car environment requires different modules in the car, such as telematics, infotainment, the mobile phone of the driver and the embedded payment device, to work in an integrated manner. In the ideal scenario, the car is not only a payment platform or mobile wallet, but also a commerce platform offering merchants’ products to the driver. Moreover, the car also becomes an intelligent device, knowing customer shopping behavior and guiding the driver to merchants for his/her shopping choices.

An ideal shopping experience in a car happens with the following flow:

  1. With behavioral analysis of the shopping choices of the driver, or based on the needs of the car (for example reducing fuel), he/she is informed by the connected car platform (telematics, infotainment…) about the merchants and products he/she prefers in the immediate area. Based on the driver’s decision, navigation can take control and bring the consumer to the merchant’s location. In the meantime, the consumer may preorder the product (such as for Quick Serve Restaurants).
  2. The Internet-of-Things (IoT) platform in the car interfaces with merchants’ devices (i.e. gas pumps, parking meters) via V2X communication technologies (BLE, Wifi or GPS).
  3. The merchant backend platform knows the driver is in proximity and wants to buy a product.
  4. The merchant CRM may know the behavior of the consumer and may offer him/her a discount or special, personalized offer.
  5. The consumer signs in to the car platform with a Car-PIN or biometric verification.
  6. The consumer initiates the pre-payment process, chooses payment parameters, products and card type, and defines the amount to be paid.
  7. The amount of payment may need to be validated at the end, as it might be different to the initially defined amount in certain cases, such purchasing gas.
  8. A secondary payment transaction is needed if the transaction amount is different to the initial value.
  9. Payment is completed and a digital invoice is sent to the consumer.


To be able to achieve success, it is important to have a good use case scenario. It absolutely must bring value to the end user. It also needs to be secure and simple. End users may be offered value-added services, such as discounts and loyalty bonuses.

Upgrading merchants’ devices and backend systems is another challenge. Merchants’ devices should support communication with cars via one of the IOT methods, such as BLE, wifi or GPS. Merchants’ backend systems need to be upgraded to support transactions from cars. Most merchants today still do not even support EMV transactions.

Implementing payment technology in the car also brings some challenges. If the car’s OEM wants to implement an embedded payment hardware and Secure Element, while this is the best way in terms of security, the manufacturing process may take a long time. On the other hand, car OEMs may start with a simpler model in which they can keep customer credentials in the cloud in their wallet or in a third party wallet. In this scenario, no hardware is required in the car; however, payment is not as secure as in a Secure Element based transaction.


Gas station and parking payment is one of the best use cases. Going to a store for a gas payment is not such a convenient method. Consumers need to leave their cars and walk to the store. Sometimes they might have kids in their cars or sometimes the weather might be too hot or too cold. Of course, some merchants want consumers to walk into their stores so that they might buy some other products in addition to the gas. This may be resolved through the merchants offering their products to the car platform. It is crucial at this point for merchants to have a CRM and Data Analytics, so that they can offer consumers products and campaigns in a wiser way.


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