The global market for in-vehicle payment systems was estimated at USD 4.23 billion in 2021 and is predicted to increase at a compound annual rate of growth (CAGR) of 13.2% between 2022 and 2030. In-car payment services enable drivers to order and purchase food, drinks, gasoline, groceries, parking spaces, and tolls without leaving the vehicle.
Improvements in Internet of Things (IoT) technologies and concerted efforts by many manufacturers to incorporate new, advanced entertainment methods in their models are likely to drive market expansion over the following decade. The increased demand for frictionless payment options in the because of the COVID pandemic and ongoing advances in vehicles are some of the major reasons for industry growth.
MasterCard, PayPal and Visa, among others are collaborating with manufacturers worldwide to create and incorporate new payment methods and systems in vehicles. For example, General Motors Co. partnered with MasterCard in May 2017 to develop and create a new in-vehicle payment system.
Market Methodology
Connected cars are automobiles with technology built into them, allowing them to communicate with other technologies. Vehicles use their interconnection to offer in-vehicle payment options to passengers.
As a result, connected cars’ increasing acceptance and growth are predicted to increase demand for these payment systems globally. Furthermore, major brands, including Mastercard, Visa, and many others, are engaging in automated digital payments, which are projected to impact the market soon.
For example, in January 2019, Visa signed a collaboration with SiriusXM Linked Vehicles Solutions Inc. to improve the in-car customer experience and provide automakers that use SiriusXM’s connected vehicle services with a SiriusXM e-wallet. The partnership will also allow Visa cardholders to use these payment services to pay for petrol, coffee, parking, cinema tickets, and other items.
Payment services
In 2021, the credit and debit payment segment held the biggest market share of roughly 53%. Debit and credit cards are the most common payment methods, and they are widely used for contact and contactless purchases. The increased desire for cards, cardless transactions, and post-cash transactions among people of all ages are likely to drive market expansion over the forecast timeframe.
The mobile-wallet sector accounted for a sizable proportion of the industry in 2021 and is expected to grow at a 14.2% CAGR from 2022 to 2030. The expanding popularity of electronic payment methods and the comfort and ease of pocket payments are particularly exciting for individuals to use in-vehicle payment systems, also contributing to the market’s growth.
As a result, various apps or wallets, such as Amazon Pay, AliPay, Google Pay, Apple Pay, Samsung Pay and Venmo, are commonly utilized for payment. Meanwhile, as part of their efforts to aid consumers in buying and making payments interactively, both Amazon and Google have linked their virtual assistants to their respective payment gateways and e-wallets.
Application Insights
In 2021, the food/coffee sector accounted for approximately 27% of total revenue. Passengers and drivers increasingly prefer to order coffee and meals on their way to work, offices, or other destinations.
Drivers have recognized that waiting in traffic to buy food and coffee is no longer an option. As a result, drivers prefer to place an order, make payments, and simply collect their items on the way that can save time and prevent inconvenience, fueling the appeal of in-vehicle online payments.
From 2022 to 2030, the parking category is expected to grow at a 15.4% CAGR. Over the projection period, the huge number of commercial and passenger cars is predicted to contribute significantly to the expansion of the parking segment. According to OICA data, sales of commercial cars in China climbed 18.7% year on year in 2020.
Driving Factors
Fuel growth
Growth Growing traffic road congestion, toll plazas, gas stations, parking lots, and other locations encourage individuals to utilize these payment options. Adopting these digital payments in such apps will save effort and make it easy for their customers to pay and order for a variety of things. After that, infrastructural expansion of these locations to accommodate in-car payment is projected to drive industry growth in the coming years.
Propel growth
The increasing digitalization of automobiles and the expanding usage of IoT and mature 5G connection will likely drive global supply for in-car payment solutions. Furthermore, with rising awareness of different in-vehicle methods in developing and underdeveloped nations and expanded applications throughout the forecast period, these solutions are anticipated to fuel market expansion.
Drive growth
Government-enforced social distancing requirements in the face of the pandemic and growing public safety concerns were projected to increase demand for contactless solutions, accelerating the implementation of in-vehicle online payments. Furthermore, the attention of major companies such as Mercedes-Benz, General Motors, Hyundai, Honda, and others on creating contactless linked vehicle payment systems is expected to boost the market growth.
In-Vehicle Payment Systems: Highlights
- The industry is segmented, and the level of fragmentation will diminish over the the next decade. This in-vehicle online payments market forecast research provides a complete study of the main market vendors to assist players in strengthening their market presence
- The research also provides industry executives with data on the competition environment as well as insights into the various product offerings provided by various organizations
- Continuous advancements in connected car technologies and IoT have resulted in the migration of mobile wallets to dashboards, as OEMs now collaborate with card networks and numerous shops to outfit their car offerings with in-vehicle digital payments
In-Vehicle Payment Systems: Key Takeaway
- Market CAGR for the predicted period 2021-2025
- Detailed information on the elements that will support the expansion of the in-vehicle online payments market over the next five years
- Estimated market size for in-vehicle payment systems and its contributions to the parent market
- Forecasts for future trends and shifts in consumer behavior
- The expansion of the market for in-vehicle payment systems all over North America, Europe, South America, APAC and MEA
- An examination of the market’s market environment, as well as thorough information on vendors
- Detailed information on the reasons that would impede the expansion of in-vehicle online payments market vendors
Conclusion
Due to the increasing use of connected cars and the rise of telematics, the market for in-vehicle payment systems will likely expand rapidly during the forecast period. The global market for in-vehicle payment systems is anticipated to be worth $36.68 billion by the end of 2025.
The expanding popularity of e-commerce and the increasing usage of digital wallets are some of the primary factors driving the expansion of in-vehicle payment systems. However, during the forecast period, the hurdles for in-vehicle payment systems are projected to be a lack of understanding about in-vehicle transactions and worries about data security and privacy.
Some of the solutions for driving the in-vehicle payments market include using NFC-enabled phones for in-vehicle transactions, biometric authentication, and blockchain technology. Because of the increasing use of connected cars and the rise of telematics, the market for in-vehicle payment systems will likely expand rapidly during the forecast period.
