In-Car Payments 101

car wallet

Over the past few years, we’ve covered a wide variety of new payment technologies. Both payment and consumer electronics companies have experimented with adding payment capabilities to all types of devices. Given the ongoing innovation in this space, it’s not surprising that there’s a new target that many players in this space have their sights set on. That target is adding payment technology to cars. Although this may seem a little far-fetched at first, we’re going to cover everything you need to know about why in-car payments actually make a lot of sense.

Who’s Focused on In-Car Payments?

As of now, there are four big companies who are really focused on in-car payments. Two of those companies are car makers, and the other two are credit card brands. The four companies we’re talking about are Honda, General Motors, Visa, and Mastercard. Each car maker has chosen to partner with one of the credit card companies. Honda is working with Visa and General Motors is working with Mastercard. The goal of these payments is to allow people to pay for parking, gas, and tolls without needing anything other than their car.

The Technology Behind These Payments

Although this concept is relatively new, the current solutions aren’t trying to reinvent the wheel. In the prototype that Honda unveiled at CES, their method of transmitting payment information is Bluetooth. This is a proven technology, and is one of the two technologies most commonly used for contactless payments. The other technology is NFC. The reason Bluetooth makes more sense for car payments is it has a bigger range than NFC.

While it seems like the basic technology groundwork is already laid, there are some interesting hurdles that will need to be cleared in order for this concept to really take off. Those hurdles have to do with infrastructure that can accept payment information. Solving those challenges are why specialty companies like Gilbarco Veeder-Root and IPS Group are putting their energy into equipping gas stations and parking lots with the right technology.

The Future of In-Car Payments

In terms of what makes this type of payment appealing, there are a number of different scenarios that are easy to imagine. Some of these have to do with convenience, while others are based on safety. As more companies push into this space, it will be interesting to see how consumers react. And if other payment technology we’ve covered in the past is any indication, in-car payments may ultimately be the spark for different kinds of innovation within the payments space.

We will continue to keep you updated on the progress of this and other forms of new payment technology. If you want to ensure that your business is always ready for any new technology that make take off, choosing a payment processor that’s dedicated to actively developing their offerings is the best thing you can do.

Posted on Wednesday, July 25th, 2018