Look for a Fast Expansion of In-Car Payments Over the Next Five Years, Juniper Says

One of the most prominent examples of the so-called Internet of Things is the ability to make payments from the dashboard of a car, no mobile device needed. And now a forecast has arrived indicating the number of such transactions worldwide will balloon from 87 million this year to 4.7 billion in 2026.

North America will command the biggest share of these transactions, controlling 42%, according to “In-vehicle Payments: Opportunities, Challenges & Market Forecast 2021-2026,” released early Monday by the United Kingdom-based firm Juniper Research.

Easing the movement to pay from the dash is, in part, the increasing availability of linkable gas pumps and electric-vehicle charging stations. Another driver is the pandemic, which has “proven to be a catalyst in the growth of software-centric technological advances like in-vehicle payments solutions,” Juniper says in a white paper summarizing its research. 

Yet another factor involves increasing cooperation among car manufacturers to harmonize in-vehicle marketplaces, which are currently highly fragmented, Juniper says. That effort will require payments providers to step up their own technology-development efforts. “Payments vendors will need to quickly develop new capabilities in order to capitalize on this growing opportunity,” Juniper warns in a release issued to announce the new report. “As a result, we anticipate the rate of acquisitions and partnerships to intensify to meet these urgent requirements.”

Unsurprisingly, the research finds in-dash payment for fuel to be the leading application so far, controlling a 48% share of in-dash payment transactions, Juniper estimates. “This growth is being seen as the natural progression for fuel payments, which have evolved from cash to card payments, then to smart-phone payments, and now to in-vehicle payments,” Juniper says in its Monday release. Already, major petroleum firms like Shell Oil offer the ability to pay from a mobile device using PayPal, Apple Pay, or Google Pay, or a credit card. But Juniper urges payments providers to look ahead to tie in take-out orders for food on the same platforms they develop for fuel payments. 

Still, while the potential in this burgeoning market is substantial, it relies crucially on voice-recognition technology—a capability that Juniper warns will force payments firms to step up technology development.

Firms have already started to attack one other technology requirement—in-dash authentication. Visa Inc. and Daimler AG—the parent company of Mercedes-Benz—announced last week they are working to launch so-called native in-car payments starting next spring. The new capability will replace authentication based on third-party devices, such as a mobile phone, and will supplant passwords with biometric identification of an authorized user.