IN-VEHICLE PAYMENT SERVICES MARKET ANALYSIS

The global in-vehicle payment services market size was valued at US$ 5.36 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 17.1% from 2023 to 2030.  Increasing demand for hassle free payments at parking slots, toll plazas and gas station is fuelling the growth of the global in-vehicle payment service market. Growing customer base to achieve convenience in vehicles, and technology innovation are also driving growth of the market. Furthermore, the growing penetration of smartphone among vehicle users is another factor driving the market growth.

Global In-Vehicle Payment Services Market: Regional Insights

North America is projected to dominate the global in-vehicle payment services market over the forecast period. This is owing to highest penetration of connected cars in the region, and presence of major technological giants such as Apple Inc. and Google Inc. for development of innovative capabilities and cultural changes for competing with market players based out of the region. These factors are driving growth of the market in the global in-vehicle payment services market.

Moreover, Asia Pacific is expected to gain major growth in the global in-vehicle payment services market during the forecast period. This growth can be attributed to increasing population and growing disposable income in the region. Moreover, the growing technological proliferation and innovations in payment industry of the region are also expected to fuel growth of the market in Asia Pacific region.

Figure 1. Global In-Vehicle Payment Services Market Share (%), By Region, 2022

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Global In-Vehicle Payment Services Market Drivers:

Increasing adoption of mobile payments to fuel the market growth

Regular payment infrastructures are currently progressing. There is an infrastructure transformation in the payment industry, which is important for competing efficiently and to address progressing requirements of customers. Many countries are modernizing their infrastructure of payments. As the cost of infrastructure renovations can be high for both the bank and system, banks are finding ways to develop services and products on the infrastructure providing value to end users and accelerating the cash transactions in order to recover investments in infrastructure. Thus, growing adoption of mobile payments is increasing, and it is likely to boost growth of the global in-vehicle payment services market over the forecast period.

Rising technological innovation in automotive to fuel the market pace

Manufacturers are increasing focusing on development of inbuilt systems such as voice-based controls to enable safe shopping on the road for the drivers. For instance, General Motors and MasterCard entered into partnership for the development of a solution for in-vehicle payment. Thus, technological innovations in automotive such as connected and autonomous cars are expected to drive growth of the global in-vehicle payment services market over the forecast period.

Global In-Vehicle Payment Services Market Opportunities:

Advantages of in-vehicle payment services to create several growth opportunities in the global in-vehicle payment services market over the forecast period. The use of in-vehicle payment services can aid in ordering foods and making payments for foods and beverages along with gasoline and groceries for the drivers without them needing to get out of the call. It also helps to make payments for the parking and tolls. Thus, demand for these services is increasing rapidly, which in turn is creating growth opportunities in the global in-vehicle payment services market.

Growing need for hassle free payment systems at toll plazas, gas stations, and parking spaces is expected to bring multiple opportunities in the global in-vehicle payment services market over the forecast period. The adoption of digital payment technology such as debit card, mobile payment, credit cards is growing rapidly all over the world. Moreover, the availability of high speed connectivity of internet at fuel stations, the use of digital payment services is increasing. This in turn is creating growth opportunities in the market.

Global In-Vehicle Payment Services Market Trends:

Strategic collaborations and partnerships among market players is a recent trend

Customer experience is an important part of selling process for market players. These companies are using collaborations and partnerships for improving the in-vehicle experiences for customers and offer them with services for various applications. For instance, in January 2019, Honda introduced a completely integrated in-car experience Honda Dream Drive through their partnership with Visa. Thus, such collaborations and partnerships among market players is driving growth of the global in-vehicle payment services market.

Debit/Credit card payment segment gaining traction in the market

The popularity of debit/credit card and its widespread use is increasing for making contactless payments. Several automobile companies are working on development of a strong in-vehicle payment ecosystem in order to enable make hassle-free payments across restaurants, parking slots, gas stations, and toll stations, for consumers. Thus, debit/credit card payment methods are increasingly being adopted. This trend is expected to boost growth of the global in-vehicle payment services market over the forecast period.

Global In-Vehicle Payment Services Market Restraints:

Security of payment data as well as driver to hinder market growth

The increasing adoption of in-vehicle payment services and connected cars is driving the concerns regarding data security and data storage. Hackers are capable of locating and tracking the payment information, due to which major financial losses can occur. Thus, security of payment data and drivers is a major factor expected to hinder growth of the global in-vehicle payment services market over the forecast period. However, adoption of cloud storage is likely to resolve the data storage and management issues, which in turn is likely to support the market growth.

High cost of systems to impede growth of the market

The cost embedded systems is comparatively high than integrated systems. This further impacts adoption of in-vehicle payment services in developing regions or regions with lack of infrastructure and low budget. Along with this, the risk of payment data being leaked is also hindering adoption of this system. These factors therefore are expected to hinder growth of the global in-vehicle payment services market over the forecast period.

Figure 2. Global In-Vehicle Payment Services Market Share (%), By Mode of Payment, 2022

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Global In-Vehicle Payment Services Market Segmentation:

The global in-vehicle payment services market report is segmented into Mode of Payment and Application.

Based on Mode of Payment, the market is segmented into Credit/debit card, NFC, QR Code/RFID, and App /e-wallet based. Out of which, Credit/debit card is expected to dominate the global market over the forecast period and this is attributed to the increasing popularity of credit and debit card transactions in contactless and contact payment methods. Post cash transactions, card-not-present transactions, and card-present transaction are widely being used by people all over the world, this in turn is expected to drive growth of this segment in the coming years.

App /e-wallet based segment is also expected to witness significant growth in the near future and this is owing to the increasing adoption of digital payment techniques and the convenience and ease offered by wallet payments is also gaining popularity from several drivers and consumers. Thus, the segment is gaining traction in the global in-vehicle payment services market.

Based on Application, the market is segmented into Food & Coffee, Parking, Gas & charging stations, Shopping, Toll Collection, and Others. Out of which, Food & Coffee is expected to dominate the global market over the forecast period and this is attributed to the increasing number of passengers and drivers ordering food and coffee on their way to workplaces or their destinations. The popularity of ordering and picking the food through the vehicle is increasing, as it reduces the overall time required. Thus, the segment is expected gain significant growth in the coming future.

Gas & Charging Stations segment is also expected to witness significant growth in the near future and this is owing to the increasing use of e-wallet, QR code, and NFC on gas and charging stations. The use of these payment methods save the time of payments. Several market players are offering in-vehicle payment systems to gain a competitive edge in the market. This is further driving growth of this segment in the global in-vehicle payment services market.

Global In-Vehicle Payment Services Market: Key Developments

In February 2020, Ford Motor Company, introduced its mobility and connectivity solution, FordPass. With this solutions customers can access their automobile and seek breakdown assistance remotely.

In January 2020, Hyundai Motor Company introduced the Genesis GV80 platform for the in-vehicle payment purpose.

In November 2020, Volkswagen Passenger Cars India, announced the launch of its limited TSI edition Polo and Vento vehicles power-driven by a powerful, economical, and compact 1.0I TSI VS6-compliant engine.

In September 2021, BP Ventures announced the investment of US$ 11.9 million in a leading in-car digital payments provider in Europe, ryd.one. With this investment, the company will assist ryd to expand in the international market.

Global In-Vehicle Payment Services Market: Key Companies Insights

The global in-vehicle payment services market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R&D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global in-vehicle payment services market are BMW Group, Mastercard, Daimler Ag, Amazon, Ford Motor Company, Volkswagen Ag, Honda Motor Co., Ltd., General Motors Company, and Hyundai Motor.

*Definition:

In-Vehicle Payment Service is a system that allows drivers to make payment and transaction with companies or apps like toll gates, smart parking, gas stations, electric vehicle charging stations etc. In-vehicle payments are not a new concept, but they have recently seen rapid growth as they help reduce the number of people who have to leave their cars to pay for products and services.