VISA

Visa: Road-Tripping Into Connected Commerce’s Future

It wasn’t long ago that the measure of a car or truck revolved around such things as the punch and pull of the engine, the smoothness of the transmission, perhaps even the thump of the stereo system. Those days are not exactly gone (those types of drivers still exist, and probably always will), but the standards have certainly changed, and will continue to do so.

Sure, traits such as fuel efficiency, safety ratings and overall comfort matter a lot, but payments and commerce are increasingly being used as factors by which to judge new automobiles. Not only that, but it is becoming more important to gauge how well voice-centric software powers those features — and how well a specific vehicle can integrate into not only the larger world of connected autos, but the connected commerce ecosystem.

All those changes were featured this week at the 2020 CES event in Las Vegas — and were a central part of a recent PYMNTS conversation between Olabisi Boyle, VP of IoT Platforms at Visa, and Karen Webster.

“It’s about user experiences,” Boyle told Webster when describing the ongoing evolution of the connected vehicle ecosystem. “It can’t be technology for technology’s sake. It has to solve a problem for consumers. It has to be a consumer experience that works for people.”

As PYMNTS research has demonstrated, the potential of payments and commerce doing so is nothing short of enormous. The average American has a 51-minute, round-trip commute five days a week, the research found. That’s a lot of time to kill. Yet, those consumers are finding ways to connect, and they already power some $230 billion worth of commerce. The more efficient those connections (the less friction those in-vehicle transactions have), the more commuters are likely to spend.

Double Duty

One way to do so — a path being followed by Visa and others — is to make use of existing software and apps already inside vehicles to do what amounts to double duty when it comes to connected commerce.

A year ago, for instance, Visa and SiriusXM Connected Vehicle Services, a subsidiary of Sirius XM Holdings, announced that they were teaming up to launch a new in-vehicle payment solution. At the time, it was projected that new services from the connected car space — on-demand mobility services, and data-driven services like applications, software and remote services — could generate as much as $1.5 trillion in additional revenue for the automotive industry by 2030. So, it makes sense that other companies want to get in on the action.

A year later, as CES is about to wrap up, Visa has said that the service enables payments for gas, parking and tolls, uses tokens to secure transactions, and could open the door to even more payment experiences, including purchases from retail stores by commuters. The anchor point is voice-assisted retail, part of an in-car entertainment ecosystem that further serves to make things more efficient going forward, according to Boyle.

After all, she said, SiriusXM is already in a consumer’s car for a reason.

“It’s already designed to help you choose the music you like,” she said, “so what are the others things we can do to make it more convenient for you?” Indeed, as vehicles become even more connected (and someday autonomous), such features can transform the automobile into more than a mere machine for transport. “We can use it as a productive zone,” she told Webster.

That’s not the only big change that digital and mobile technology — whether it be voice-assisted, or stemming from OEMs, payment card networks or the likes of Amazon, Google and others — is bringing to the automotive culture, and the conception of what those machines mean. Sure, it’s a cliché these days — true, but still cliché — to say that cars and trucks are essentially a collection of software on tires. However, much more is happening, as shown not only through this specific PYMNTS discussion, but at CES this week and elsewhere.

Daily Routines

As Boyle told Webster, what’s coming to connected vehicles is the same thing that’s coming to connected commerce as a whole. As PYMNTS’ How We Will Pay research has documented, a big part of that is the desire of consumers — who increasingly own a growing number of connected devices — to do more payment and commerce tasks while performing daily routines.

This annual study found that super-connected consumers own at least six connected devices, while the average super-connected consumer owns as many as 7.7 devices. Their average age is 42 years old, 40 percent have a college degree and 51 percent earn an annual salary of more than $100,000. What’s more, 58 percent of super-connected consumers use their connected devices to make purchases.

The average super-connected consumer, on the other hand, engages in 12.5 activities each day, and makes purchases during 4.8 of these activities. This means that 39 percent of their day-to-day activities involve making a purchase.

All this indicates a massive shift, even if it may seem subtle now. As Webster told Boyle, consumers more often want payments and commerce experiences to follow them through life, not the other way around. That is happening, Boyle said, and in the connected vehicle ecosystem, much more is to come.

“One day, a universal digital wallet will connect everyone on the globe,” she said, highlighting this vision.

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Social distancing has changed eCommerce from a ‘want to have’ to a ‘must have’ for businesses, yet retailers could struggle to create convenient payment and refund experiences for their apps and websites, says Abdul Raof Latiff, head of DBS Bank’s digital institutional banking group. In the April 2020 B2B API Tracker, Latiff explains how banks can provide a timely assist via application programming interfaces (APIs) that integrate payments into those eCommerce platforms.

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