Cars that can ID their drivers can also ID their wallets
There’s no reason the automatic adjustments a car makes for different drivers can’t also select different payment accounts for different drivers, says Erick Pinos.
“The lights mirror the orientation of the seats. The car remembers who is driving it,” said Pinos, the Americas’ ecosystem lead for the Shanghai-based Ontology, an open source blockchain digital ID firm.
This type of memory can save a driver’s profile across several vehicles and for different people who drive the same car. This concept marries digital ID, or an interoperable credential that people can use to enter buildings, log in to apps or make payments, to the trend toward making the car’s internet connectivity an e-commerce lane.
Ontology and Daimler Mobility AG just finished work on Welcome Home, or decentralized in-car personalization that uses Ontology’s digital ID and e-wallet to execute searches, booking and ordering for parking, drive-throughs, e-commerce and transactions more directly related to the vehicle such as insurance.
In-car commerce is still a new industry, tailored mostly through onboard web connectivity in the car. Turning those onboard services into payment rails has been a goal of automakers and payment companies for years, but there are technology hurdles.
Connectivity is a challenge, with the merchants and other parties the driver wants to connect with; and with the payment gateway and the car’s “infotainment” system. Decentralizing in-car payments in a manner similar to distributed ledger or an interoperable ID project can place the car more firmly into a broader ecosystem of merchants, consumers and non-commerce functions.
“It combines mobility with social tools. We’re giving drivers an ID or a profile that can be plugged into any service that’s accessible via a dashboard or a phone,” Pinos said.
This way, the automotive payment system operates similar to any digital payment that's authorized by an interoperable, sharable ID. This can power searches for a parking lot, for example, based on the consumer’s preferences, then automatically book and pay for the parking spot through the same experience, Pinos said. The service is automatically turned on for each driver upon ignition, so much of the experience can happen automatically based on past usage and the driver's profile, Pinos added.
Developers are turning to distributed ledgers to address the connectivity problems with in-car commerce. Chris Ballinger, a former Toyota technology developer, in late 2019 founded the Mobility Open Blockchain Initiative to smooth commerce as well as do work on other issues such as reducing congestion and pollution.
Away from blockchain, Visa and Mastercard earlier in 2020 began work on projects to link merchants and drivers to execute in-car payments as part of the networks’ internet of things strategies. The card brands also want to standardize payment systems from automakers, hoping to bridge a gap that comes from a low number of connected cars with built-in data connectivity.
The addressable market is growing quickly. The monetary volume of in-vehicle payments through embedded systems is forecast to reach $86 billion by 2025, up from about $543 million in 2020, according to Juniper Research.
“Most of the processes for ID today place the authentication around who the person is but not what the ID comprises,” said Sterling Pratz, CEO at Car IQ, a San Francisco-based financial technology startup. “It’s all about the data that’s accumulated.”
That “data” also comes from the machine, such as the driver’s automobile. Pratz uses this data to inform a “know your machine” system that doesn’t rely on blockchain, but on AI to vet the car, driver and determine what kind of service a driver may want or a car may need. For example, Car IQ, which for now is focused on the fleet market but is planning an expansion into the consumer market, powers an app that measures how much gas a car has and automatically orders and pays for fueling via the users’ and the car’s ID.
Car IQ recently partnered with Discover to support payments for services, tools, parking and other functions. Once the service is complete, the car generates a payment file for Discover that’s paid via virtual card on Discover’s network. CarIQ said it has other similar partnerships in the pipeline, including a fleet operator that Pratz did not identify.
“The car is able to ‘speak’ to the user’s bank and authorize the funds for a payment,” Pratz said. “The data can also validate the machine and the service the machine is requesting.”