Improved connectivity bolsters in-car payments

Hyundai Pay is the latest example of the auto industry’s multiyear effort to make in-car payments a reality.

Chevron connected its U.S. fueling applications to Apple’s CarPlay tool | © Adobe Stock

Connected cars are growing in popularity because consumers are able to connect their digital wallets and pay for services without having to take out a physical wallet or leaving their vehicle. A rapidly developing trend, 96% of all new cars shipped worldwide will be connected vehicles by 2030. Connected cars are able to interact with various devices and systems that are distinct from the vehicle themselves, including forecourts, charging hubs and convenience stores.

Using embedded sensors, network connectivity and cloud computing, these cars are generating, collecting and exchanging a continual flow of data and information. Hyundai Motor Group, General Motors, Tesla Inc. already offer in-car payment solutions.

The growth in potential for in-vehicle payments has been pioneered by electric vehicle manufacturers, who were able to completely reinvent some of the onboard systems and rethink what a car is for. The number of fuel brands tapping into this technology grows by the day.

Chevron connected its app to Apple CarPlay and Android Auto to allow users pay for fuel from inside their vehicle with the dashboard. Consumers are using the apps to locate the closest pump, car wash, charge spot or renewable diesel.

“We seek to improve the experience, build the one-to-one connection and enhance the app features and functionality to keep consumers engaged,” said Jeena Lee, Chevron and Texaco apps product manager.

The tie-up marked the first time an integrated energy company connected its U.S. fueling applications to Apple’s CarPlay tool. The new fueling feature by Apple could help the auto and fueling industries expand their rewards programs.

Last week, Hyundai introduced a new feature called “Hyundai Pay” that lets owners of the 2024 Hyundai Kona pay for fuel, charging and parking. The Korean car manufacturer has partnered with Parkopedia to help drivers locate, reserve, and pay for parking at 6000 locations.

Hyundai believes the automotive industry is at an inflection point with electric vehicles, autonomous vehicles, hydrogen technology, and advanced air mobility all happening at the same time.

“Connectivity will drive customer engagement with new software defined vehicles. Customers will be looking for customization, scalability, and upgradeability. The vehicle must be able to evolve and enhance vehicle value during the lifecycle, and connectivity is one of the key ways to make that happen,” said a Hyundai in a statement to PetrolPlaza.

“Hyundai Pay” that lets owners of the 2024 Hyundai Kona pay for fuel, charging and parking | © Hyundai

Vehicle payments provider Car IQ recently teamed up with Visa to enable vehicles to transact directly with Visa’s global ecosystem of merchants and banks, and purchase fuel, tolls, parking, insurance, service, and repairs using the Car IQ Pay vehicle wallet. The payment system is accepted at over 25,000 fuel stations nationwide including Shell, Sunoco, Kum & Go and Circle K.

“One powerful trend in the rapid migration to 'smart' vehicles is the ability for them to act as a form of seamless digital payment. Car IQ’s collaboration with Visa underscores the potential that this new ecosystem can offer, facilitating significant productivity benefits around routine vehicle-related charges,” said Mark Vena, CEO and Principal Analyst at SmartTech Research.

In March, Mercedes-Benz launched Pay Plus in Germany, where car owners were able to pay for both digital services and hardware upgrades in their car by simply scanning their fingerprint. By the end of this year, Mercedes hopes to extend this feature to enable motorists to pay for fuel.

The German manufacturer also began rolling out the In-Truck Connect service with BP in the United Kingdom. The solution allows drivers to refuel their vehicles by confirming the fueling site via an app, which unlocks the pump and allows the truck to refuel. The app both pays for the fuel and logs the transaction, providing the fleet manager with accurate info on fuel purchases.

The rise of in-vehicle payments also raises important questions about security and privacy. As vehicles become another point of sale, they need to have robust security measures to protect consumer’s financial information. Automakers and their partners must also ensure that the collection and use of consumer data complies with privacy regulations.

According to data acquired from Upstream, a cybersecurity and data analytics platform for connected vehicles, automotive cyber incidents have increased by 387% from 2017 to 2022. Manufacturers, retailers and fleet owners will have to be aware of system vulnerabilities.

The automotive and trucking industry is currently undergoing a vast transformation of the digital and connected age. Fuel retailers and charging operators will have to work side by side with them to make that a reality.