Beyond Paying for Gas and Tolls, J.P. Morgan’s Max Neukirchen Envisions ‘Delightful’ Connected Economy on Wheels

The car — that steel horse that’s the main way we get to where we need to go — is rapidly becoming a conduit of commerce.

And as that happens, original equipment manufacturers (OEMs), or car manufacturers in this case, have the ability to deepen their relationships with the consumers who buy their cars and find value in the range of expanded functions that are available as they sit behind the wheel, navigate the dashboard and get things done as they get going.

J.P. Morgan CEO of Merchant Services Max Neukirchen told Karen Webster that the car is “becoming a device,” connecting us to payments, to a broad range of services tied to maintaining the vehicle itself and even, eventually, to banking.

Right now, transportation-connected commerce is a bit fragmented. There are apps to get gas, there are apps to (virtually) feed parking meters and apps to pay tolls. The connected car experience, for lack of a better term, is hitting some speed bumps, if not outright potholes. But the journey toward an “Uber-like” experience, where payments are embedded, automatic and magically take place behind the scenes, is well underway.

PYMNTS research has shown connected consumers who have grown accustomed to the convenience of interacting with devices in their homes and offices now expect the same level of seamless service while in their cars and trucks. Specifically, the average commuter owns about 80% more connected devices than their non-commuting counterparts.

Read more: Remember Commuters? They Still Want To Be Connected While They Drive

And against that backdrop, J.P. Morgan said earlier this month that it has struck a deal with German carmaker Volkswagen (VW) to buy roughly 75% of its Volkswagen Payments S.A.

See more: J.P. Morgan Acquires 75% of Volkswagen’s Payments Unit

Although the financial terms of the deal were undisclosed at the time of the announcement, the move by J.P. Morgan comes ahead of the automaker’s launch of in-car payments technology, which would reportedly let users pay automatically for fuel and tolls.

Neukirchen told Webster the overarching goal is to bring mobility-enabled payments beyond the confines of transportation related transactions — in other words, well beyond gas and tolls.

It’s a marked change from the efforts of automakers and Big Tech firms to develop their own operating systems to cement customer relationships. The venture between VW and J.P. Morgan, he said, will feature advanced technology that will power use cases to be shared across the industry, giving OEMs a more direct connection to their end users, but without having to do the heavy tech lifting in enabling the payments and the commerce aspects on their own. The joint venture will bring some standardization to car-related commerce, which in turn can be leveraged by other OEMs as they seek to broaden their own connected commerce efforts.

Valuing Convenience

Consumers value the convenience cars give them, Neukirchen said, “and now, more and more, the car is becoming a convenient method to pay.”

Sooner rather than later, he added, we won’t need separate devices or apps to get gas — the car will pay for it. Vehicles also are fast becoming a way to download and consume content (those TVs can help keep kids reasonably complacent during long road trips). Radio subscriptions abound.

“All of this gets consumed by the car in the car and can be paid for through a connected car,” said Neukirchen, who added that the integration of payments into telematics can help streamline and automate the insurance and vehicle maintenance-related activities, improving overall customer experience, across any number of endpoints (even in B2B, where service centers and their own suppliers can conduct seamless commerce).

There’s another angle with the venture, Neukirchen said. The efforts crystalizing between VW and J.P. Morgan position both companies well for a future of mobility that will be marked by the continued embrace of electric vehicles (EVs). Within the next few years, EVs will be a third of light vehicle units sold across Europe, Asia Pacific and North America. That means charging stations are going to proliferate in towns, parking garages and homes, and along highways. With that infrastructure in place, payments infrastructure must modernize to facilitate payments to make sure consumers can pay as they recharge.

Looking ahead, he said, “We want to power car manufacturers and power companies to offer their consumers a frictionless and delightful experience.”