In-Vehicle Payment System Market Size, Share & COVID-19 Impact Analysis, By Mode of Payment (Credit/Debit Cards, RFID, e-Wallets, and QR Code), By Application (Fuel/EV Charging, Shopping, Food and Drinks, Parking, and Toll Collection), and Regional Forecast, 2023-2030

The global in-vehicle payment system market size was USD 1.12 billion in 2022. The market is projected to grow from USD 1.53 billion in 2023 to USD 6.18 billion in 2030 at a CAGR of 22.03% in 2023-2030.

The in-vehicle payment system is an automotive system equipped with e-commerce technologies. The system enables users to execute payments or transactions for various applications such as toll gates, smart parking, gas stations, and charging stations. Moreover, the system also provides the facility for passengers to make purchases directly from their vehicle’s dashboard, consequently eliminating the usage of smartphones while driving. Therefore, the increasing demand for convenient and efficient contactless transactions among the populace is driving the adoption of in-vehicle payment services.

The surge in adoption of in-vehicle payment services across established economies in the past few years and their growing awareness worldwide are shifting the focus of automakers to equip their upcoming models with advanced infotainment systems. For instance, various well-known automotive brands such as Honda, General Motors, Mercedes, and others have already rolled out their in-vehicle payment services in the past few years. This inclining focus of OEMs toward developing in-car payment services is expected to boost the in-vehicle payment system market growth in the coming years.

COVID-19 IMPACT  

Government Enforced Lockdowns Restrictions Reduced Vehicles on Road, Which Hampered the Market Growth

As the COVID-19 pandemic shrinks the life of major economies by restricting pastimes and hindering travel and commuting activities, government-enforced lockdowns amid the COVID-19 pandemic also constrained the use of passenger cars and public transport. Therefore, in 2020, similar to the global automotive industry, in-vehicle systems also observed a disruption in market growth.

However, the market recovered quickly due to a surge in demand for contactless payment solutions worldwide and loosened lockdown restrictions in the following years. Moreover, major companies started rolling out their in-vehicle payment services as contactless payment solutions resulting in market recovery. For instance, in March 2021, Mercedes rolled out contactless in-vehicle fuel payment services in Germany to cater to the increasing demand for contactless payment solutions amid the pandemic. The company also confirmed its intentions to expand its fuel and pay service in other European countries by the end of 2021.

LATEST TRENDS

Rising Trend for Adoption of Connected and Autonomous Vehicles to Drive Market Growth

Connected cars are vehicles with technology integrated into the user’s daily life, enabling the vehicle to exchange data with external technologies. Connected cars utilize their connectivity to offer various insights and services, including in-vehicle payment services to passengers. Therefore, the growing adoption and development of connected cars is expected to improve the demand for in-vehicle payment services worldwide. Additionally, big brands such as Mastercard, Visa, and others are investing in connected car payment technologies, which is further anticipated to influence market growth in the near future.

Moreover, the growing trend of integrating smart infotainment systems in connected vehicles is expected to drive the demand for in-car payment services significantly. Smart infotainment systems are equipped with advanced technologies that provide vehicle users with various functions including vehicle data, media consumption, in-vehicle payments, and smartphone mirroring, which are some of the major trends observed in the automotive sector. These factors are expected to boost in-car services adoption exponentially over the forecasted period.

DRIVING FACTORS

Increasing Demand for Contactless Payment Solutions to Drive Market Growth

The government enforced extensive social distancing guidelines amid the pandemic, and growing safety concerns among the populace are expected to fuel the demand for contactless payment solutions. These factors are further accelerating the adoption of in-vehicle payment services. Additionally, the focus of major players such as Mercedes, General Motors, Honda, Hyundai, and others toward developing contactless connected vehicle payment solutions is anticipated to drive market growth.

Growing Traffic Congestion to Fuel the Market Growth

Growing traffic congestion on roads, toll plazas, gas stations, parking spaces, and other places influences the populace to adopt in-vehicle payment services. Using in-car payment technology in these applications saves time and allows consumers to order and pay conveniently. Technologies like smart parking let the drivers choose the nearest parking spot for their vehicle, and the tickets can be paid for using the vehicle’s in-car payment system. This avoids unnecessary congestion and eliminates the hassle of finding a free parking space. Therefore, infrastructural development of these places for compatibility with in-car payment is expected to boost market growth in the near future.

Growing Digitalization in Automotive to Propel Market Growth

Growing digitalization in automobiles, the rising adoption of Internet of Things (IoT), and maturing 5G connectivity are expected to fuel the demand for in-car payment solutions worldwide. Additionally, growing awareness of various in-vehicle services across underdeveloped and developing economies and the expanding applications of these services are likely to propel the market growth during the forecast period.

RESTRAINING FACTORS

High Risk of Data Leak and Data Hacks May Restrain Market Growth

The in-vehicle payment systems provide an easier and more efficient way of delivering contactless payments. However, the growing integration of connected technology is also proving to be a risk for data hacks and leaks. The threat of getting system hacks and accessing private and confidential user data is one of the leading concerns among users and service providers. These exact issues are one of the major reasons why the populace and consumers hesitate to allow manufacturers to access vehicle info and telematics data.

Building strong firewalls and protection protocols can avoid data hacks and system breaches. However, these technologies bear additional cost-making the entire system highly expensive. These few factors are expected to restrain the market growth of the in-vehicle payments market.

SEGMENTATION

By Mode of Payment Analysis

Increasing Preference for Flexible and Contactless Payment to Drive e-Wallet Segmental Growth

Based on the mode of payment, the market is segmented into credit/debit card, RFID, e-wallet, and QR code.

The e-wallet segment is anticipated to register at the fastest growth rate over the forecast period. E-wallets have witnessed a surge in acceptance in the past few years due to their high convenience and fast transaction capability. Moreover, e-wallets eliminate the need for carrying physical cards and cash. The rising popularity of these e-wallet applications is expected to increase significantly throughout the forecasted period.

The credit/debit card segment held the leading market share in 2022 and is estimated to endure its position in the in-vehicle payment system market share throughout the forecast period. Greater consumer preference for using credit and debit cards for contactless payments is driving the segment growth. Moreover, due to the higher reliability of debit cards and credit card online portals, most consumers rely on credit and debit transactions for higher security reasons, thus owning their market share.

The QR code and RFID segment is also expected to witness a considerable growth rate in the future. Similar to e-wallet, QR code also enables fast and flexible transactions. Moreover, expanding QR code and RFID adoption in various applications, such as gas/charging stations, parking spaces, toll plazas, etc., will likely boost segment growth over the forecast period.

By Application Analysis

Expanding Applications of In-Vehicle Payment System for Parking Spaces to Drive Growth for Parking Segment

Based on application, the market is segmented into fuel/EV charging station, shopping, food and drinks, parking and toll collection.

The fuel/EV charging station segment led the market in 2022 and is expected to continue its dominance during the forecast period. The demand is attributed to higher payments processed at Fuel and EV charging stations. According to the data published by infopulse, 47.2% of the daily commuters were found using connectivity applications at a gas station. Moreover, with the growing development of EV infrastructure and automakers rolling out more and more EVs, such factors are expected to drive the demand during the forecasted period.

The toll collection segment is expected to witness the fastest growth rate during the forecast period. The growth is due to the infrastructural improvement of toll plazas to be compatible with various modes of payments and consumer preference for contactless delivery. Additionally, the emergence of newer vehicle infrastructure, such as smart parking and Infrastructural development of parking spaces, coupled with the increasing demand for parking spaces in urban regions, is likely to propel the segment growth. Increasing passenger and commercial vehicle sales worldwide are also expected to boost the segment growth.

The food and drinks segment also witnessed a significant growth rate during the forecast period. Increasing demand for on-the-go foods and beverages among drivers and passengers will likely drive the segment's growth. Moreover, increased traffic congestion encourages the populace to utilize in-vehicle payment services for food and drinks purchases.

The toll collection segment is likely to witness a considerable growth rate. Furthermore, growing consumer preference for shopping through various online marketplaces for convenience coupled with extensive social distancing guidelines during the pandemic has positively influenced the shopping segment growth.

REGIONAL INSIGHTS

Technological Advancements to Help North America Dominate the Market

North America dominated the global market with a size of USD 0.50 billion in 2022 and is expected to continue its dominance in the coming years. The presence of technological advancements in North America is likely to boost market growth in the region. The high penetration of connected vehicles in the U.S. is the major driving factor for the market. Additionally, the presence of the largest payment service providers, Mastercard, Visa, and others, and their collaboration with automakers such as General Motors, Honda, and others to develop in-vehicle payment systems are expected to propel the market growth during the forecast period.

Europe held the second-largest in-vehicle payment services market share in 2022. The presence of a strong automotive industry and increasing penetration of new-generation connected vehicles are expected to propel the fastest market growth during the forecast period. Germany has the highest penetration of connected vehicles in Europe, followed by France and the U.K. Moreover, automakers’ focus on rolling out in-car payment services across major European countries is also anticipated to propel market growth. For instance, in March 2021, Mercedes announced its plans to expand its in-car payment services across Europe by the end of 2021.

Asia Pacific is expected to have a significant CAGR over the forecast period. Increasing penetration of connected vehicles in major countries of APAC, including China, India, Japan, and others, is expected to fuel the market growth in the region. Additionally, the growing preference for contactless payment solutions among the populace and the high traffic congestion in the region are likely to accelerate the adoption of in-vehicle payment services in the coming years. The in-vehicle payment systems are still in the introduction phase across the developing economies of APAC. However, the increasing popularity and adoption of connected automobiles and improving connectivity and infrastructural developments are expected to create lucrative opportunities for the market in years to come.

The Rest of the World, including the Middle East & Africa, and Latin America are expected to witness a considerable CAGR from 2023 to 2030. The market is in the introduction phase in MEA. However, the growing adoption of connected vehicles in Latin America due to the strengthening automotive industry in the region is likely to fuel market growth shortly.

KEY INDUSTRY PLAYERS

Strategic Partnerships and Collaborations to Drive Competition

Customer experience is the major selling point for brands operating in the market. The companies utilize strategic partnerships and collaborations to improve the in-vehicle experience for customers and provide them with in-vehicle payment services for a wide range of applications. The companies are rolling out new in-vehicle payment services using these strategic partnerships. For instance, in March 2021, ChargePoint and Volvo announced an extension of their partnership by launching an in-car app for EV charging stations. This technology allows the drivers to pay at the EV charging station without tapping or swiping the card.

Daimler AG is one of the Leading Players in the Market with Strong Brand Portfolio 

Daimler AG is a leading multinational in-vehicle payment service provider based in Germany. The company is also one of the world’s leading passenger and commercial vehicle manufacturers. It operates through various brands, including Mercedes-Benz, Smart (micro-hybrid cars), and Maybach (luxury automobiles). The company manufactures commercial vehicles through brands such as Freightliner, Western Star, Sterling, Setra, Thomas Built Buses, Orion, and Fuso. In November 2021, Mercedes-Benz announced a global partnership with Visa to offer in-vehicle payment services with a secure fingerprint scanner for secure contactless transactions.

LIST OF KEY COMPANIES PROFILED:

• ZF Friedrichshafen AG (Germany)


• BMW AG (Germany)


• Daimler AG (Germany)


• JAGUAR LAND ROVER AUTOMOTIVE PLC  (U.K.)


• General Motors Company (U.S.)


• Honda Motor Co. Ltd. (Japan)


• Hyundai Motor Group (South Korea)


• IBM Corporation (U.S.)


• Mastercard Inc. (U.S.)


• Visa Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2023: Sumitomo partnered with Vodafone to develop an in-vehicle payment platform. The company aims to enter the in-car payments market as it recognizes newer revenue growth opportunities.


• December 2022: Parkopedia announced the addition of a new in-vehicle feature provided by the German automaker BMW. The in-vehicle payment platform provides a seamless parking payment experience for BMW users and is now available in Germany and Austria. The services offer a convenient way to find parking spaces and pay for them through the vehicle’s dashboard screen.


• September 2021: BP Ventures announced to invest USD 11.9 million in Europe’s leading in-car digital payments provider, ryd.one. The investment will assist ryd in expanding in the international market.


• August 2021: Blackberry announced a strategic partnership with California-based fintech firm Car IQ to develop technology for secure vehicle-based payment capabilities by utilizing its cloud-connected in-car software platform, BlackBerry IVY, and direct access to vehicle sensors.


• May 2021: Parkopedia launched its new integrated multi-domain payment platform to facilitate all major in-vehicle payments, including EV charging, parking, tolls, and fueling.

REPORT COVERAGE

The market report provides a detailed in-vehicle payment system analysis and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the market report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the market's growth over recent years.

Report Scope & Segmentation