In-car payments may see boost from Hyundai Pay launch

The news: Hyundai launched an in-vehicle payments system called Hyundai Pay, per a press release.

• It lets drivers find and pay for things within their vehicle's touchscreen using stored credit card information.
• The system is rolling out with the 2024 Hyundai Kona this fall before being added to nine other models.
• Hyundai Pay’s first partnership is with Parkopedia to launch a parking payment system that lets customers reserve and pay for parking at 6,000 locations.

The bigger picture: Hyundai joins a growing list of carmakers and payments companies investing in in-car payments.

• Mercedes-Benz debuted Mercedes Pay in 2018 and has ramped up its payments capabilities, launching biometric authentication through a tie-up with Visa and also partnering with Parkopedia this summer.
• Stripe partnered with BMW in January to power payments made from BMW’s ConnectedDrive Store.
• Apple expanded CarPlay’s payment capabilities through partnerships with quick-service restaurants like Panera and Domino’s and with Chevron.
• And JPMorgan acquired 75% of Volkswagen Payments in 2021.

How it benefits Hyundai: Turning a car into a payment method can give automakers competitive advantages.

• In-car payments let drivers conveniently conduct fuel payments, parking payments, and food and drink orders.
• It can also make these transactions safer by limiting the functionality to things like saved orders and hands-free calling. This can reduce distracted driving compared with trying to navigate a mobile app behind the wheel.
• And in addition to improving the driver experience, which can attract more customers, it also gives carmakers a new revenue stream and access to the valuable payments market.

Why it matters for payments providers: Payment providers want to capitalize on the booming in-car payments market, especially as more automakers make these payments accessible to consumers.

• We expect 151.4 million people will drive connected cars this year, per our forecast. Of those, 45.5 million drivers will use Apple CarPlay—edging out Android Auto users, at 29.9 million.
• And as connected cars grow, so will car payments: the connected-vehicle payments industry will reach $600 billion by 2030, per consulting firm Ptolemus.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a three-times-weekly recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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