Con­nected Cars Drive To­ward a Cash­less So­ci­ety

The early use cases for in-car pay­ments es­tab­lish a roadmap for fu­ture in­no­va­tion.

ISO & Agent - - INSIDE 09/10.2017 - BY SARAH WYNN

As more auto man­u­fac­tur­ers build in­ter­net con­nec­tions into their dash­boards, more op­por­tu­ni­ties arise to turn cars into pay­ment in­stru­ments.

So far, the use cases for dig­i­tal pay­ments from con­nected cars seem too spe­cific to spark a widespread shift in con­sumer habits. But con­nected cars may yet prove to be driv­ers of change. The cur­rent use cases are fuel pay­ments, park­ing pay­ments and or­der­ing ahead for cof­fee. These may seem like small cat­e­gories, but they also rep­re­sent some of the lin­ger­ing ex­am­ples where tech­nol­ogy has strug­gled to re­place cash.

“We ex­pect cash to con­tinue to de­cline, but it will not go away in 5-10 years,” said Do­minic Ven­turo, chief in­no­va­tion of­fi­cer at U.S. Bank.

In the short term, the pay­ments in­dus­try can keep chip­ping away at these niche use cases.

“While dig­i­tal trans­ac­tions are be­com­ing in­creas­ingly main­stream, and the more de­vices can se­curely com­mu­ni­cate with each other – such as a car to a gas pump or a dish­washer to a com­puter when the de­ter­gent is low – the more we will see cash use sub­side,” Ven­turo said. “There a num­ber of rea­sons why we need cash less than in the past.”

One such ex­am­ple is Jaguar’s pact with Shell to sup­port dig­i­tal fuel pay­ments from within the car.

Shell an­nounced in Fe­bru­ary that Jaguar will be rolling out 2018 mod­els armed with a new app,“fill Up & Go,” that in­ter­acts with Shell gas pumps. U.K. driv­ers have been us­ing the app since July 2015, and driv­ers in the U.S. will have the op­por­tu­nity to use the app in

the man­u­fac­turer’s 2018 F-PACE, XE and XF mod­els.

“As the world slowly moves to­wards be­com­ing a cash­less, au­tonomous so­ci­ety, re­tail­ers like Shell need to ac­com­mo­date those cus­tomers who no longer use cash,” said Stu­art Blyde, Shell’s se­nior in­no­va­tion man­ager.

How­ever, these changes won’t be hap­pen­ing at full speed, due in part to con­cerns about safety and driver dis­trac­tions.

With the new mod­els, driv­ers can in­stall the Shell app and drive up to any pump at a Shell ser­vice sta­tion, then use the ve­hi­cle’s touch­screen to de­cide how much gas to buy with Ap­ple Pay or Paypal.

This en­tire process must take place while the car is parked, said Peter Virk, Jaguar Land Rover’s direc­tor of con­nected car and fu­ture tech­nol­ogy. Virk em­pha­sizes that this re­stric­tion makes the process safer than if it were han­dled through a smart­phone app.

“Our tech­nol­ogy al­lows users to put their phone away out of sight and use it via the touch­screen in the car, be­cause as the car be­comes more con­nected to the In­ter­net of Things we will al­ways be guided by what is ap­pro­pri­ate and safe to do while driv­ing,” Virk said.

Ap­ple Pay and Paypal use to­k­eniza­tion to keep driver’s fi­nan­cial in­for­ma­tion se­cure, so that a stolen car doesn’t au­to­mat­i­cally equate to a stolen credit or debit card, U.S. Bank’s Ven­turo noted.

But does this mean in the fu­ture, the U.S. will be com­pletely cash­less?

Ac­cord­ing to a 2016 Pew Re­search study, 24% of Amer­i­cans said they don’t use cash dur­ing a typ­i­cal week. Sep­a­rately, 24% stick strictly to cash in a given week and 51% use both.

Re­tail­ers now want be part of an en­vi­ron­ment where they can tell what cus­tomers want and how they want to pay, Virk wrote in an email.

“In a con­nected world the cus­tomer is mak­ing de­ci­sions and trans­act­ing in a dif­fer­ent way, so re­tail­ers have to join this con­nected world and en­sure their ser­vices are of­fered dig­i­tally,” he said.

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