In-Car Contactless Payments: The Next Generation of Mobile Commerce

Contactless payment methods are more prevalent than ever. Banks, credit card companies, retailers and technology firms have embraced this form of commerce, propelling the market for contactless payment hardware and software to new heights. Last year, the space generated an estimated $6.7 billion in revenue, according to research from MarketsandMarkets. That figure is expected to increase at a compound annual growth rate of 21 percent, reaching $17.5 billion by 2021.

A good portion of that growth might come from an unusual source: automotive companies. Car manufacturers are exploring contactless payment deployment options in an effort to round out the connected car concept. The idea makes sense, considering over half of American adults shop via smartphone, according to data from Pew Research. Some automakers believe they can surely parlay this collective enthusiasm for mobile e-commerce into an exciting new retail model with the connected vehicle at the center.

How might this unfold on the road? Here are some of the contactless payment innovations car companies are currently developing:

The contactless key
General Motors was perhaps the earliest proponent of vehicle-based contactless payment technology. Back in October 2015, the automaker partnered with MasterCard to create a key fob designed for use with near-field communication-equipped point-of-sale terminals, according to a joint press release. While the two firms only managed to produce a prototype – which debuted at the Money20/20 conference in Las Vegas that year – the partnership did bring the idea of the payment-ready key fob into the mainstream.

It may have been the GM-MasterCard collaboration that led DS Automobiles, the French auto conglomerate that operates the Citroen brand, to pursue the technology on a wider scale. Earlier this month, the company launched the DS 3 Connected Chic, a payment-enabled key fob that works with any NFC POS terminal, TechRadar reported. Users can leverage the Barclaycard bPay mobile application to load as much as $270 onto the device and send across as much as $40 per transaction.

This product will provide concrete insight into how consumers will interact with contactless car key technology. Roughly 10 percent of buyers purchase items using credit or debit card data loaded onto their smartphones, according to research from the credit card service company Total System Services. This state of affairs may point to future success for DS Automobiles and other vehicle manufacturers exploring payment-ready vehicle key fobs. However, it is likely that the implementation methods will be more varied by the time these devices go mainstream.

For example, innovators like the engineers at LISNR® are pioneering data-over-sound solutions that can serve as secure alternatives. With groundbreaking technology like data-over-sound in play, the payment-enabled key fobs of tomorrow will be even more powerful than those available today. Instead of interacting with POS terminals via NFC technology, these devices might transmit user payment details through non-audible tones, facilitating optimal convenience while reducing the likelihood of data loss.

Buy from behind the wheel
While car companies like GM and DS Automobiles look into the commercial potential of the modern car key, luxury giant Jaguar Land Rover looks to revolutionize the in-car experience with payment technology that will allow occupants to purchase goods and services without leaving their vehicles, TechCrunch reported.

In February, the British car brand announced a partnership with Royal Dutch Shell, rolling out an application that gives drivers the power to fuel their cars through their in-dash navigation units. Users can select the amount of fuel they wish to fill and then use Android or Apple Pay to complete the transaction. The application, which uses geolocation services and Wi-Fi to find and communicate with sensor-equipped fuel pumps, produces a receipt on screen and sends out a second copy via email. This in-car payment portal is available now.

Of course, Jaguar is not alone when it comes to this particular innovation. A month before the U.K. car brand announced its payment application, Honda, in partnership with fuel pump maker Gilbarco Veeder-Root, smart parking meter manufacturer IPS Group and Visa, debuted a similar solution at the 2017 Consumer Electronics Show in Las Vegas, according to a press release. The system allows vehicle occupants to fill gas and pay for parking from the comfort of the car cabin. However, the application was merely a proof-of-concept and has yet to go into production.

The future of in-car payment
With automakers pursuing innovations such as these, the in-car contactless payment movement is bound to pick up steam. While widely used technologies like NFC can certainly facilitate this emerging commerce methodology, there are more effective and secure alternatives on the horizon – namely, data-over-sound.

At LISNR®, we produce near-ultrasonic, ultra-low power data transmission technology that enables fast, reliable and secure communication between devices that have microphones and/or speakers. This technique, which does not require internet connectivity of any kind, is the ideal data migration method for carmakers developing fast and secure in-car contactless payment systems.

In January, we stopped by the North American International Auto Show in Detroit to participate in the AutoMobili-D exhibition showcasing innovators in the automotive technology space. There, we showed attendees how the LISNR® solution can help move connected car technology forward. LISNR® is also participating in the Jaguar’s Portland Tech Incubator, using our expertise to propel smart vehicle technology forward, including in-car payment systems.

Interested in learning more about what we do here at LISNR®? Connect with us today.