In-Vehicle Payment System Market Size, Share & COVID-19 Impact Analysis, By Mode of Payment (NFC, QR Code/RFID, App/e-Wallet, and Credit/Debit Card), By Application (Parking, Gas/Charging Station, Shopping, Food & Coffee, and Toll Collection), and Regional Forecasts, 2021-2028

The global in-vehicle payment system market size was USD 2.98 billion in 2020 and is projected to grow from USD 3.32 billion in 2021 to USD 12.50 billion in 2028 at a CAGR of 20.9% in the 2021-2028 period. Based on our analysis, the global market exhibited a huge decline of 10.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative demand shock across all regions amid the pandemic. The rise in CAGR is attributable to this market demand and growth, returning to pre-pandemic levels once the pandemic is over.

The in-vehicle payment system is an automotive system equipped with payment technologies. This system enables the driver to execute the payment or transactions with various companies or applications such as toll gates, smart parking, gas stations, charging stations, and others. Additionally, the system allows the passengers to make purchases directly from their vehicle dashboard, making the process time-efficient and convenient. Therefore, the increasing demand for convenient and efficient contactless transactions among the populace is driving the adoption of these services.

The surge in adoption of in-vehicle payment services across developed economies in the past few years and their growing awareness worldwide are shifting the focus of automakers to equip their upcoming models with the in-vehicle payment system. For instance, various well-known automotive brands such as Honda, General Motors, Mercedes, and others have already rolled out their 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.

Government Enforced Lockdowns Amid Pandemic to Hamper Market Growth

As the COVID-19 pandemic shrinks the life of major economies by limiting the pastimes and discouraging travel and commuting activities, government enforced lockdowns amid the COVID-19 pandemic also restricted the use of passenger cars and public transport. Therefore, in 2020, similar to the global automotive industry, in-vehicle systems witnessed 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 also started rolling out their in-vehicle payment services as contactless payment solutions resulting in the 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 pandemics. The company also confirmed its intentions to expand its fuel & pay service in other European countries by the end of 2021.

LATEST TRENDS

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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 communicate with external technologies. Connected cars utilize their connectivity to offer in-vehicle payment services to passengers. Therefore, the growing adoption and development of connected cars is expected to boost the demand for these type of 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 the market growth in the near future.

For instance, in January 2019, Visa announced the partnership with SiriusXM Connected Vehicles Services Inc. to enhance the in-vehicle customer experience and offer SiriusXM e-wallet to automakers who deploy SiriusXM’s connected vehicle services. The partnership will also offer Visa account holders to pay for gas, coffee, parking, movie tickets, and more through these payment services.

Additionally, globally maturing 5G connectivity deployment coupled with the progressing level of autonomy in autonomous and connected vehicles is expected to drive market growth in the near future. Moreover, the growing penetration of connected vehicles in emerging economies such as China, India, and others is also anticipated to fuel the demand for in-car payment.

DRIVING FACTORS

Increasing Demand for Contactless Payment Solutions to Drive Market Growth

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

Growing Traffic Congestion to Fuel Market Growth

Growing traffic congestion on roads, toll plazas, gas stations, parking spaces, and other places influences the populace to adopt these payment services. The use of this payment technology in these applications will save time and enable consumers to order and pay conveniently. Therefore, infrastructural development of these places for compatibility with in-car payment is expected to boost the market growth in the near future.

Growing Digitalization in Automotive to Propel Market Growth

Growing digitalization in automobiles and the rising adoption of 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 Cost of Embedded Systems May Restrain Market Growth

The high cost of embedded systems compared to integrated systems is expected to hinder the market growth during the forecast period. Additionally, cybersecurity and vulnerability threats associated with using in-vehicle payment services such as security issues related to personal data, card numbers, CVV, PIN, and others are anticipated to restrain the adoption of in-vehicle payment system during the forecast period.

SEGMENTATION

By Mode of Payment Analysis

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Increasing Preference for Flexible and Contactless Payment to Drive Segmental Growth

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

The credit/debit card segment held the largest market share of 56.67% in 2020 and is expected to continue its dominance during the forecast period. High consumer preference for the use of credit and debit cards for contactless payments is driving the segment growth. Additionally, its growing adoption rate among the populace of various age groups across developed and developing economies for safe and convenient transactions is likely to fuel the segment growth during the forecast period.

The app/e-wallet segment is anticipated to register the fastest growth rate over the forecast period. App and e-wallet payment modes have witnessed a surge in popularity in the past few years due to their high convenience and fast transaction capability. The rising popularity of these digital payment apps and e-wallets, including Google Pay, Apple Pay, Amazon Pay, and others, coupled with the flexibility to pay through mobile devices and on-demand apps, is expected to drive the segment growth during the forecast period.

The QR code/RFID segment is also expected to witness a considerable growth rate in 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, and others, is likely to boost the segment growth over the forecast period. The NFC segment is also expected to register significant growth owing to its ability to execute instant payment & transactions using mobile devices.

By Application Analysis

Expanding Applications of In-Vehicle Payment System for Various Transactions to Drive Segment Growth

Based on application, the market is segmented into parking, gas/charging station, shopping, food & coffee, and toll collection.

The gas/charging station segment led the market in 2020 and is expected to continue its dominance during the forecast period. Rising traffic congestion on roads and gas/charging stations is likely to boost segment growth in the near future. Additionally, the increasing adoption of new-generation electric vehicles due to changing government norms on emission control is also expected to influence segment growth. Moreover, automakers’ efforts to roll out in-vehicle fuel payment services for customer convenience and increased connected vehicle sales worldwide are likely to accelerate the market growth during the forecast period.

The parking segment is expected to witness the fastest growth rate during the forecast period. Infrastructural development of parking spaces coupled with the increasing demand for parking spaces in urban regions is likely to propel the segment growth. Additionally, increasing passenger and commercial vehicle sales worldwide is also expected to boost the segment growth.

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

The toll collection segment is likely to witness a considerable growth rate due to the infrastructural development of toll plazas to be compatible with various modes of payments and consumer preference for contactless delivery. 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

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North America dominated the global market with market size of USD 1.38 billion in 2020 and is expected to continue its dominance in the coming years. The presence of technological advancement in North America is likely to boost the market growth in the region. The high penetration of connected vehicles in the U.S. is the major driving factor for the market. Additionally, 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 market share of the market in 2020. The presence of a strong automotive industry and increasing penetration of new generation connected vehicles are expected to propel the 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 witness an eye-catching 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 these type of 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 is expected to witness a considerable CAGR from 2021 to 2028. 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 in the near future.

KEY INDUSTRY PLAYERS

Competitive Landscape 

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 these services for a wide range of applications. Using these strategic partnerships, the companies are rolling out their new in-vehicle payment services. For instance, in January 2019, Honda rolled out a fully integrated in-car experience Honda Dream Drive through its partnership with Visa. Furthermore, in August 2018, General Motors also announced its partnership with Dutch oil giant Shell to roll out embedded, in-dash fuel payments services.

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

Daimler AG is one of the leading multinational in-vehicle payment service providers based in Germany. Additionally, the company is one of the world’s leading passenger and commercial vehicles 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 (Friedrichshafen, Germany)


• BMW AG (Munich, Germany)


• Daimler AG (Stuttgart, Germany)


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


• General Motors Company (Michigan, U.S.)


• Honda Motor Co. Ltd. (Tokyo, Japan)


• Hyundai Motor Group (Seoul, South Korea)


• IBM Corporation (New York, U.S.)


• Mastercard Inc. (New York, U.S.)


• Visa Inc. (California, U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2021: Parkopedia Launched a New Multi-Domain Payment Platform In 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.


• September 2021: BP Ventures Announced to Invest In Ryd.One In 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.

REPORT COVERAGE

An Infographic Representation of In-Vehicle Payment System Market

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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, this report offers insights into the in-vehicle payment system 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