Demand for tokens is growing as cars become the ultimate mobile payment device

The connected economy has hit the road, transforming everything and turning all kinds of vehicles into mobile commerce endpoints.

At the center of it all is the technology to support this transformation — and also the partnerships between FIs, providers and OEMs in the effort to disrupt everything from pay-at-the-pump to parking.

U.S. chipmaker Qualcomm said on Thursday its auto industry pipeline had grown to $30 billion, up $10 billion since it reported third-quarter results in late July, Reuters reported. A strong chip pipeline, we note, shows that there is demand for manufacturers to build — as quickly as possible — the vehicles of the future.

For Qualcomm, the demand is tied in part to the company’s Snapdragon Digital Chassis product which, in turn, is used in the manufacturing supply chain — by equipment manufacturers and suppliers — to improve vehicle connectivity. This connectivity enables everything from in-vehicle infotainment to autonomous driving and self-parking.

Partnerships between chipmakers and automakers abound. In Qualcomm’s case, it’s expanding its existing partnership with Mercedes Benz, where the latter will use the Snapdragon Cockpit for the car’s infotainment system starting next year.

Partnerships also extend beyond equipment and technology providers. The path to forging the connected economy on wheels has everyone interested.

JPMorgan has struck a deal with German automaker Volkswagen to buy nearly 75% of its financial services unit — underscoring the appeal (and, shall we say, necessity) of in-car payment technology.

Also read: JPMorgan acquires 75% of Volkswagen’s payments unit

Cars become appliances

JPMorgan Managing Director of Merchant Services Max Neukirchen told Karen Webster that the car is “becoming a device,” connecting us to a range of activities, including payments. And we’re moving beyond the fragmentation of apps that have separate functions — paying tolls, paying parking meters, etc.

As with the VW deal, he told Webster that the advanced technology will establish a direct connection between OEMs and their end users, but without having to do the heavy lifting to enable the payments and commerce aspects themselves.

Read more: Beyond paying for gas and tolls, JP Morgan’s Max Neukirchen envisions ‘pleasant’ connected economy on wheels

Breakthroughs are also being proven with other partnerships, which use technology to turn vehicles into point-of-sale (POS) terminals. In July, Sunoco said it would connect with fleet payment solutions platform Car IQ, which will enable secure fuel payments without a physical credit card. The initiative is being rolled out at nearly 5,000 Sunoco locations across the U.S. In terms of mechanics, drivers using Car IQ Pay at Sunoco stations need only enter the pump number, fill up and drive away.

As the connected economy evolves, open innovation – and open collaboration – will guarantee and accelerate the future of mobility, said Kevin Mull, director of mobility solutions at Bosch in a recent conversation with PYMNTS CEO Karen Webster. In this context, the divisions between manufacturers and original equipment suppliers are disappearing.

We’re not too far from a future where the parking experience itself is automated, connected and completely seamless. Imagine the seamless operation as a driver pulls into a parking space, pulls into a designated drop zone, exits the vehicle, and presses “park” on a smartphone app. The self-driving car drives off and finds its own parking space while the consumer walks away. (Uber, in this case, may seemingly be heading for some mediation, especially when it comes to getting to the airport.)

Also read: Large fleets, open innovation and payments will drive the future of mobility

As Webster herself noted in a recent column, there’s cross-pollination in the works that will lead us to drive (literally) those mobile terminals – and connect commerce in between. There is a positive ripple effect that has a deep reach. PYMNTS data showed that a 10% increase in the use of digital tools in transportation and mobility use cases encourages activities in other use cases, such as streaming and gaming, and even ordering groceries.

New PYMNTS study: How consumers use digital banks

A PYMNTS survey of 2,124 US consumers shows that while two-thirds of consumers have used FinTech for some aspect of banking, just 9.3% call it their primary bank.


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