July 24, 2024
In-Vehicle Payment Services Market
Ict

Rising consumer demand for contactless payment options to accelerate adoption of in-vehicle payment services Market in automobiles

The global In-Vehicle Payment Services Market is estimated to be valued at US$ 6.28 Bn in 2023 and is expected to exhibit a CAGR of 17% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
In-vehicle payment services include applications that allow drivers and passengers to make payments for goods and services directly from their vehicles. They provide contactless and seamless payment options while on-the-go. Examples of in-vehicle payment compatible services include fuel payments at gas stations, toll collection on roads, parking and drive-through restaurant payments. Major automobile manufacturers are partnering with digital payment players to embed payment functionality within infotainment systems for an enhanced user experience.

Market key trends:
One of the key trends in the in-vehicle payment services market is the rising demand for contactless payment options from consumers. The COVID-19 pandemic has accelerated this trend as consumers strive to minimize physical contact during financial transactions. Various auto makers are adding payment wallet integrations and NFC/BLE-enabled interfaces to support contactless payments directly from vehicle dashboards. Additionally, partnerships between automakers and meal delivery or fuel delivery services allow users to order and pay for these services without exiting their vehicles. Technologies such as 5G,AI and IoT are also enabling enhanced personalization and security for in-car payment services.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the in-vehicle payment services market is highly fragmented which means there is competition among existing players. However, setting up payment infrastructure requires huge capital investment which limits new entrants.

Bargaining power of buyers: The bargaining power of buyers is high in this market as buyers have plenty of options to choose from in terms of payment service providers. Buyers can switch between service providers based on offer price, additional benefits, and quality of service.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as a few big technology companies dominate the digital payment processing market. However, collaborations between vehicle manufacturers and payment providers balance the dependence of in-vehicle payment services on technology providers.

Threat of new substitutes: The threat of substitutes is low as there are limited substitute products for contactless in-car payment systems. Traditional payment modes require extra steps like parking, taking out cards, entering pins which cannot match the convenience of embedded automotive payment solutions.

Competitive rivalry: The competitive rivalry is high due to presence of global vehicle manufacturers and technology giants offering customized in-vehicle payment platforms.

Key Takeaways

The global In-Vehicle Payment Services Market Share is expected to witness high growth, exhibiting CAGR of 17% over the forecast period, due to increasing usage of connected vehicles and demand for seamless payment experience. North America dominated the market in 2023 backed by large tech companies providing advanced payment solutions in the region. Europe also captured significant market share due to auto manufacturers incorporating e-payment capabilities in new cars.

Key players operating in the in-vehicle payment services market include BMW Group, Mastercard, Daimler Ag, Amazon, Ford Motor Company, Volkswagen Ag, Honda Motor Co., Ltd., General Motors Company, and Hyundai Motor. BMW Group’s DriveNow and ReachNow offers in-vehicle payment services in multiple cities across Europe and the US. Mastercard implemented Masterpass in-car payment solution in several Mercedes-Benz models. Amazon is collaborating with vehicle manufacturers to embed Amazon pay in future cars.

Regional analysis- The Asia Pacific region is expected to witness fastest growth during the forecast period supported by rising sales of luxury vehicles equipped with digital cockpits and growing consumer awareness. Countries like China, Japan and South Korea are emerging as major markets. Europe and North America dominated currently due to established automotive industry and increasing adoption of mobile payment technology.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it