HAMPSHIRE, U.K.–A new study from Juniper Research is projecting the global transaction volume of in-vehicle payments will exceed 4.7 billion by 2026, up from just 87 million in 2021.
In-vehicle payments are those where payments are made via vehicle systems, without requiring use of a smartphone to process the transaction.
“This extraordinary growth of over 5,300% in the next five years will be driven by increasing industry collaboration and initiatives from vehicle manufacturers, aimed at reducing the high level of fragmentation between different in-vehicle marketplaces,” said Juniper Research in releasing the findings. “Payments vendors will need to quickly develop new capabilities in order to capitalize on this growing opportunity. As a result, we anticipate the rate of acquisitions and partnerships to intensify to meet these urgent requirements.”
The new research, In-vehicle Payments: Opportunities, Challenges & Market Forecasts 2021-2026, found that North America will have the largest in-vehicle payments share of transactions by volume; accounting for 42% of all transactions globally by 2026. The growth is driven by a large installed base of payment-enabled vehicles and a high level of partnerships in place. The recent collaboration between industry participants in North America will be beneficial in overcoming fragmentation and incentivizing user adoption through rewards and loyalty schemes over the next five years, Juniper Research said.
The Most Common Payment
The research found vehicle fueling will be the most common use case over the next five years, accounting for around 48% of total in-vehicle payment transactions by volume.
“This growth is being seen as the natural progression for fuel payments, which have evolved from cash to card payments, then to smartphone payments, and now to in-vehicle payments,” the company said.
The report recommends that stakeholders look beyond fueling and EV charging to develop additional use cases such as coffee shop and fast food pick-up payments via the vehicle dashboard; using existing infrastructure in developed regions. Enabling voice commerce will be critical in exploring these opportunities, and will require vendors to develop new capabilities.
The report can be found here.