As Tesla announced that it will sell its Autopilot function via an in-car subscription and BMW launches its ConnectedDrive Store, Ptolemus Consulting Group forecasts that 600 million vehicles will generate in-car transactions of half a trillion dollars by the end of the decade.
Ptolemus’ Connected Vehicle Payments Global Study is the first in-depth report to analyse how vehicle commerce (v-commerce) will open up new revenue opportunities for payment providers (such as Mastercard), car manufacturers and merchants (from Exxon to McDonald’s) in verticals such as tolling, fuelling and parking.
This supply-driven market will see OEMs offer their customers payments for greater convenience, a cashless experience and enhanced customer relationships and retention.
Ptolemus expects the v-commerce market to be dominated by fuel and parking payments. However, strong growth will also be generated by content subscriptions, software updates, EV charging, food & beverage and grocery purchases.
According to Andrew Jackson, Research Director, Ptolemus Consulting Group, “The revenue potential for v-commerce is considerable for both OEMs and vertical market players. In-car payments exist already in the aftermarket today, but our research finds that 17 car makers are already developing embedded payment solutions. Furthermore, COVID-19 is triggering a take-off in electronic payments, which OEMs can benefit from.”
Ptolemus’ report analyses the strategy of 17 OEMs (including Audi, Daimler, FCA, GM, Hyundai and Tesla), that are developing a connected car payment programme. Honda’s Dream Drive, Mercedes Pay and Volkswagen Pay are a few examples. Furthermore, the race for revenue from connected vehicle payments is not just for OEMs, with SiriusXM, Shell, Visa, Harman and Xevo, plus many others, entering the market with their own solutions too.
Jackson says: “We fully expect v-commerce will disrupt existing aftermarket value chains for fuel card services, electronic toll collection (ETC), parking services and mobility payments. V-commerce is set to be big business”.