The Car as a Payment Device

A new global technology partnership between Visa and Daimler shows that anything with a digital heartbeat could become a highly secure, fully authenticated, always-on payment device. From the spring of 2022, their customers in Europe will be able to pay for goods and services by using their fingerprint in the car. It’s a breakthrough that takes us a step closer to ubiquitous commerce and spells opportunity for all digital brands.

Each year, we typically spend around 500 hours behind the wheel.¹ As well as being a place where we spend a lot of time, our cars consume a significant proportion of our everyday spending. When you factor in purchasing costs, fuel, insurance, and servicing, it adds up to an average of more than $10,000 a year.² Then, on-the-road spending at service stations, carparks, and tolls increases the spend significantly. Think forward to the mass uptake of newer technologies like Electric Vehicle (EV) charging, and evermore sophisticated in-car infotainment systems, and it’s higher still.

Indeed, by 2025, the total volume of in-car payments is set to reach approximately $86 billion.³

With the advent of autonomous vehicles, the game changes again. When there’s no need to actually drive the car, all those hours are liberated. The vehicle truly becomes a ‘third place’ for work or play – or anything in between.⁴

For a company like Daimler, the aim is to give customers a secure, easy way to acquire and consume any imaginable mobility-related products and services. In doing so, it aims to take advantage of a full range of digital, connected car technologies, and to wrap them up in the type of luxury customer experience that the Mercedes-Benz brand is famous for.

“In partnership with Visa, Daimler aims to offer native in-car payments that meet the requirements of two-factor authentication in a secure and user-friendly way,” explains Franz Reiner, CEO of Daimler Mobility. “There is nothing more convenient than authorising a payment with your fingerprint. A luxury customer experience of course includes the aspect of safety, and we fulfil that through native in-car payment. We offer our customers security not only when driving, but also when paying.”

“This is a really interesting example of how a world leader in digital payments and the inventor of the automobile are able to combine their technologies to create the next generation of smart solutions for the automobility sector,” commented Antony Cahill, Visa’s Deputy CEO and Head of European Markets. “As a world-leading hub for payments and automotive innovation, Europe offers the perfect environment to pilot test and launch these industry-leading solutions.”

As a first step, starting in the UK and Germany, Daimler is enabling payments for in-car services, such as advanced travel assistance or enhanced cruise control. In the future, it aims to encompass any type of payment related to personal mobility, such as parking, EV charging, infotainment, or curb-side delivery. It is a compelling vision. But, in the world of payments, turning a compelling vision into a technological reality requires thinking through a myriad of security considerations, and ensuring that regulatory expectations are also met – not least the European Union’s requirements around Secure Customer Authentication (SCA).

“Finding a solution in partnership with Daimler was an interesting intellectual and technological challenge,” explains Niels Lohmüller, Head of Acceptance Development for Visa in Central Europe. “It had to be secure and comply with regulations, yet it couldn’t compromise driving safety. And, most important of all, it had to be a fantastic user experience.”

Together, the two companies devised an elegant solution, in which the car itself is used as one factor of authentication, supplemented by a range of enabling technologies, such as the Visa Cloud Token Framework and the Visa Delegated Authentication Program. But what is of greater significance, argues Niels Lohmüller, is the longer-term impact for the payment sector. “Although this is an important partnership, which is set to liberate vast new payment flows, the implications go beyond in-car commerce. We live in a world where billions of physical objects are being embedded with sensors, processing ability and software, that can connect and exchange data with other devices and systems over public networks. This opens a huge opportunity for convenient and smart commerce in a digital world.”

In-car commerce is therefore just one possible application.

“In the future, anything with a digital heartbeat could be used to initiate secure, frictionless digital payments. With the Daimler solution, we’ve developed an architecture that can be adapted for any multiple scenarios. By encouraging and enabling more clients and partners to adopt the latest technologies, we can all win in digital.”