Ecosystems

Payments Takes The Driver’s Seat In Connected Cars

What still stands as a type of existential dread (or, in some cases, a period of freedom) is on the verge of becoming a new and lucrative source of commerce, along with a rich opportunity for payment providers: the commute. The average American has a 51-minute round-trip commute five days a week, new PYMNTS research has found. That’s a lot of time to kill.

However, those consumers are finding ways to connect, and they already power some $230 billion worth of commerce. That research, though, combined with recent developments at this week’s CES show in Las Vegas, points to a future where more commuters can connect on the road, with technology enabling more commerce, paving the way to rewards for retailers, payment services providers and others.

At the same time, it’s becoming more clear about how connected consumers want to pay — though there is little question that, as the ecosystem develops, those payment habits could develop, too.

It all comes down to this: What was once a task associated with boredom, frustration and even alienation is transforming into an experience that could be among the most connected of consumers’ daily lives — one that turns the commute away from wasted time, and into one associated with efficiency and getting multiple things done, and which is closely tied to payments.

Payment Habits

It should be no surprise that gas stands as the biggest purchase for internet-connected commuters, according to the new Digital Drive Report from PYMNTS. However, the fact that those consumers spent about $62.3 billion on such purchases in 2018 also indicates the importance of making sure connected vehicles enable not only in-vehicle and mobile fuel purchases, but navigation services, as well as loyalty and discount offers tied to such transactions.

Coffee, too, fuels commutes, as internet-connected consumers spent $16.7 billion worth on java last year, according to the PYMNTS research. They spent $43.9 billion on groceries, $47.2 billion on other foods and $5.8 billion on parking — all types of commerce being targeted by the emerging connected vehicle ecosystem, and all of which require collaboration between the automotive, retail, payments and mobile sectors.

The PYMNTS research found that 64 percent of commuters have downloaded apps to help make such purchases, and that 38.5 percent of payments made during commutes were done via apps, with food and coffee at the highest rate of app-enabled purchases. “More than half of all connected commuters who ordered coffee for pickup at a drive-through used apps to pay (54.1 percent), while slightly fewer commuters (48.8 percent) who ordered coffee near their workplace[s] to pick up [did] the same,” the report found.

When it comes to those apps, consumers want more than just the ability to buy.

That’s because  according to the research and regarding the app functions most used by commuters  loyalty and rewards, along with coupons and discounts, stood ahead of such features as making purchases, placing orders and finding merchant locations. Discounts and loyalty programs clearly have a place in commanding the commerce habits of connected commuters.

Voice Assistants

It’s not just apps that are important to the emerging ecosystem of connected vehicle payments and commerce. Voice-assistant technology promises to be a big part of the story.

According to the Digital Drive Report, 53.3 percent of commuters are turning to voice assistants to connect while driving. Of those commuters, 36.6 percent use voice assistants to connect to the internet via their mobile devices. Those trends were tied into the increasing popularity of voice-assistant technology in overall retail — evidence of that recently came from Amazon, which said that orders placed via Alexa during the recent holiday shopping season were three times higher than a year ago.

Food and beverages, and parking, are helping to build that voice-controlled connected car ecosystem, according to PYMNTS research. It found that nearly 14 percent of connected commuters reported using voice assistants to pre-pay for parking and order food for delivery while driving. In addition, 13.6 percent said they used voice assistants to pre-pay for groceries to pick up later.

“Voice options have changed the relationship between commuters, devices and the apps commuters use to interact with the commuting commerce ecosystem,” the report found. “For example, our survey revealed that Apple’s voice assistant, Siri, was the most-used among commuters. Siri is used by 54.3 percent of commuters who use voice options on their devices to perform basic functions, like making phone calls or taking music requests.”

Google Vs Amazon

The integration of smartphone voice assistants — something that consumers are already used to — was one of the developments out of the first part of CES this week. For example, Samsung subsidiary HARMAN displayed what it called Digital Cockpit 2019. The concept mainly revolves around the settings for drivers — temperature, gas level and so forth — instead of direct commerce, but it does show how the future connected vehicle experience is likely to include voice-assistant technology.

“The aim for HARMAN’s system is to seamlessly integrate the in-car experience with the user’s smartphone so that they can use favorite personal assistant apps like Google, Alexa and Samsung’s Bixby in their vehicles just as they do in their homes,” according to one account.

For now, Google appears to have an edge in the connected vehicle ecosystem, according to the PYMNTS research. “More than 40 percent of our commuters surveyed reported using Google Assistant either through their mobile devices or integrated into their vehicles’ dashboards,” the report found. “That’s considerably higher than the 14 percent of commuters who reported using Alexa.” More specifically, the report found that “nearly half of Google Assistant users (49.3 percent) turned to the technology to find a gas station, while slightly fewer (40.9 percent) used it to order food from a drive-through.”

Also at CES, Honda demonstrated its Honda Dream Drive prototype, billed as the “next-generation infotainment, commerce, services and rewards” experience for drivers and passengers. Honda Dream Drive is both voice-activated and touch-enabled, and for commerce options, the automotive giant said it has partnered with a series of firms, ranging from Grubhub to The Coffee Bean & Tea Leaf, and Chevron to Atom Tickets, among others.

Payment Expansion

That’s not all: To drive toward its own vision of the connected car ecosystem, Honda, which already had a relationship with Visa, said it is expanding its in-vehicle collaboration to include Mastercard and PayPal. Visa, for its part, said this week that it is now working with SiriusXM Connected Vehicles Services, a subsidiary of Sirius XM Holdings, to launch an in-vehicle payment solution.

Infotainment will also play an increasing role in the connected vehicle ecosystem. According to another account from CES, Audi and Disney “unveiled an in-car VR entertainment system, which adapts the content to the movements of the car. The game itself is called ‘Marvel’s Avengers: Rocket’s Rescue Run’ and is based on the journey itself. If the car turns right or accelerates, the spaceship in the experience does the same.” There was no immediate retail capability announced as part of that game, but it’s not difficult to see how such content can lead to commerce — specifically, contextual commerce opportunities — in the near future.

Cars and trucks are no longer just cars and trucks. They are software attached to axles and wheels, according to some observers. They are the ultimate mobile devices, according to others. “Vehicles are no longer just machines that transport commuters,” the PYMNTS research said. “They have evolved into commerce-enabling mechanisms.” Consumers will see more evidence of that, not only from this year’s CES, but from further connected car developments in 2019.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the December 2019 Mobile Card App Adoption Study, PYMNTS surveyed 2,000 U.S. consumers for a reveal of the four most compelling features apps must have to engage users and drive greater adoption.

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