The future of payments is rapidly evolving, and in-vehicle payments are poised to be at the forefront of this transformation. With the rise of connected cars and the increasing demand for seamless payment experiences, it's no wonder that in-vehicle payments have become a hot topic of conversation in the payments industry.

But what does the future hold for this technology? To get an expert's perspective, we spoke with an industry insider, Evgeny Klochikhin, Founder of Sheeva.ai, an in-vehicle service technology. He shared his insights on what we can expect to see from in-vehicle payments over the next few years.

From the potential for increased convenience and security to the challenges that must be overcome, our expert provides a comprehensive look at what the future may hold for the in-vehicle payments market in our latest podcast.

Here’s what he had to share:

Q. Can you tell us about what in-vehicle payments are and what is the importance of in-vehicle payments?

Evgeny Klochikhin: In-vehicle payments have been an area of interest for automotive manufacturers and service providers for some time. The market has been growing due to consumer demand for various payment methods and conveniences. However, customer engagement and daily use have been challenging, as highlighted in a recent report. To address this, companies are exploring ways to create a seamless and helpful experience for customers. In-vehicle payments are defined as the ability to pay for something without leaving the comfort of your car.

An approach that several automotive manufacturers are currently implementing involves a location-based, one-touch activation for services like electric vehicle charging and parking sessions. This approach is expected to make in-vehicle payments more accessible and easier to use for consumers.

Q. Can you shed some light on the key drivers for the in-vehicle payments market, which are expected to drive the growth of this particular service in the coming years?

Evgeny Klochikhin: In my view, mobile payments and digitization have been key drivers of the in-vehicle payments market. The shift toward contactless payment methods has been particularly evident during the COVID-19 pandemic, with examples like Apple Pay and Google Pay gaining popularity. India has also seen a surge in digitization, with companies like Paytm and UPI payments becoming more accessible through digital wallets. The convenience of utilizing a mobile device, whether it's a phone or a vehicle, has made the digitalization of payments an attractive proposition for consumers. As cash becomes less popular and contactless experiences become the norm, the in-vehicle payments market is expected to grow continuously.

Listen to the complete podcast here: 

Q. Just as a coin has two sides, I'm sure that there would be other challenges regarding the in-vehicle payments being faced by the users or companies. So, could you just highlight a few of the challenges that are currently present in the market and how the companies are looking to overcome such challenges?

Evgeny Klochikhin: Thank you for this question. So, the main challenge in the in-vehicle payments market is connecting all the pieces together. Payments involve the flow of money from one subject to another, and this needs to be managed by financial institutions such as banks. The difficulty lies in connecting the distribution, which is implemented through technology in the vehicle or OEM app, to the collection and transfer of payments to service providers like fuel stations, electric vehicle charging companies, or parking companies. This requires involving payment networks such as Visa, MasterCard, UPI, or NPCI in India. The challenge is in combining all these pieces together in a seamless and secure manner.

Q. As you rightfully mentioned, the complexity of this entire system is one of the major challenges. Would you like to highlight something related to cyber security or the cyber-attack threats within this particular market?

Evgeny Klochikhin: Yes, of course. So, cybersecurity and data privacy are two critical considerations in the in-vehicle payments market. Transactions must be recorded accurately and securely, with a clear definition of the customer and authentication data to prevent fraud. An architecture that protects customer data is essential, as is ensuring PCI compliance, which is a standard defined by payment networks such as Visa, MasterCard, and American Express to ensure the protection of raw credit card data. Failure to ensure these standards could lead to fraud and compromise customer trust in the in-vehicle payments market.

Q. Can you shed some light on the game-changing developments in the in-vehicle payments market?

Evgeny Klochikhin: In my view, the key development in the payment industry has been the digitalization of payment architectures, resulting in the exposure of APIs. This means that companies like Shiva.ai can connect to existing APIs, also known as retail automation APIs, and utilize them to activate point-of-service or pay for services such as fuel, electricity, and parking in industries such as energy and EV charging. Exposing these APIs is a significant development that allows for better user convenience and provides an opportunity to connect vehicles to the payment ecosystem as an authentication method. This trend is expected to continue, benefiting multiple service providers in the industry.

Conclusion

The next few years are expected to be an exciting time for the in-vehicle payments market. With the integration of contactless payments, the emergence of new players, integration with smart car technology, increased integration with mobile devices, and the need for standardized protocols, the in-vehicle payments market is expected to experience significant growth and innovation in upcoming years.

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