Payments services providers and fintechs have unleashed a flurry of collaborative innovations over the course of the past decade in order to expand on the sector’s ever-evolving definition of contactless payments. Yet for all the advances PSPs have brought to market, the automotive applications of contactless payments have thus far remained relatively unexplored.
A series of inventive new partnerships is about to change that.
At the start of September, Nissan announced it had struck a“first-of-its-kind” deal with FLEETCOR to fit its new Brazilian models with contactless payment tags. These electronic RFID stickers are produced by FLEETCOR subsidiary Sem Parar, and will be factory installed in all Brazilian Nissans by the end of 2019.
Humberto Gómez, marketing director at Nissan Brazil, said the move reinforced the brand’s commitment to transforming its cars to make drivers’ lives easier – and bearing in mind that Nissan produces an estimated 50,000 new cars in Brazil every year and is expected to triple this output by 2022, that should mean a huge rise in uptake for Sem Parar’s rapidly expanding domestic contactless payments network of 5.5 million customers.
Launched in 2000, Sem Parar specialises in digital toll, parking and fuel payment solutions, and its extending network has grown over the last two decades to include all of Brazil’s highway tollbooths, over 1,300 car parks, 650 gas stations and 350 drive-throughs across 13 states.
In October 2018, the firm unveiled a partnership with McDonald’s that enables drive-through customers whose vehicles are fitted with an RFID tag to pay for their orders using voice activation. Drivers simply state to the drive-through staff they’re paying with Sem Parar, the transaction is recorded on the car’s payment tag using radio frequency identification and the amount is then added to the invoice that Sem Parar sends its users at the end of each month.
The same method can be applied at Shell petrol stations in Brazil – and all that new Nissan owners will need to do in order to take advantage of this contactless, voice-activated commerce functionality will be to register their Sem Parar tag online. Customers who opt to activate the service will then be offered 12 months of the tiered service for free.
Nissan’s new partnership with FLEETCOR definitely qualifies as pioneering, and it’s by far the biggest market advancement in contactless payments drivers have seen to date. Yet it’s worth pointing out this is not the only promising payments experiment taking place in the automotive sector in 2019.
In August, Commerzbank announced the first successful test of its blockchain-powered machine-to-machine payments system after completing a fully automated transaction between an electric charging point and a Daimler truck system. For the transaction, Commerzbank issued Euros on a blockchain and gave Daimler “cash on ledger” in a company smart wallet to process the payment – demonstrating the system’s ability to settle mutual payments without any human intervention whatsoever.
Meanwhile, British manufacturer Jaguar Land Rover is effectively looking to combine both of these concepts after announcing the launch of testing on a crypto ‘earn-as-you-drive’ scheme that will see Jaguar owners credited with cryptocurrency in exchange for sharing information about traffic jams and potholes with other Jaguar owners on the company’s new drivers’ network. Those credits will then be collected in a car-linked smart wallet that can subsequently be used to claim back rewards like coffee, petrol, pay tolls or use charging points.
While smaller manufacturers are likely going to be awaiting the results of these tests before investing in their own payments infrastructure, there is a certain inevitability around the expansion of automotive payments. According to P97 Network’s Digital Drive Report 2019, more than half of all commuters already pay for items on the road while using an app, paving the way for this latest wave of in-vehicle payment tests to converge into a $37 billion industry in the US alone by 2023.
The market is definitely moving – and if industry forecasts turn out to be on par, the automotive industry could be the stage for a massive payments revolution in the medium term.
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