As cars' onboard computers get smarter, payments are coming along for the ride—but always taking a back seat to other features.

"We dine a lot in the car, we eat a lot in the car, and if you think about it having to take out a credit card to pay in a drive through or while you're on the road is a hassle and it can be scary," said Joanna Pena-Bickley, chief creative officer, IBM Interactive Experience. IBM, General Motors, ExxonMobil and Mastercard are collaborating on an in-car computer system that will enable payments among its array of services.

The partners are trying to seize the moment where payments moves from cards, and even mobile devices, to a verbal, dynamic experience embedded in everyday activities such as driving a car.

"This is one of the early steps in a rethinking of the payment process, moving from conscious, overt payment decisions to a higher frequency, lower value semi-automated payment," said Thad Peterson, a senior analyst at Aite Group. "This is how payments will augment 'Internet of Things.' The payment is gradually becoming an ingredient in commerce rather than a discrete activity."

The dashboard of a General Motors concept car
The dashboard of a General Motors concept car IMAGE: Bloomberg News

IBM is a key player here, flexing its artificial intelligence muscle to power a variety of transactions. In two days, it announced Watson would power 'IBM Pay' apps for merchants and will be the brain behind OnStar Go, General Motors' mobile platform. General Motors is adding artificial intelligence and verbal command technology to an already aggressive move into in-car retail shopping and payments.

"A big part of the mobile journey is what you buy while you're in your car," said Mark Lloyd, consumer online officer at General Motors.

As for Mastercard, the collaboration is a chance to put its brand into another family or household devices, following up on its collaboration with Samsung to be the card brand for a Web-connected refrigerator.

"Long gone are the days where the plastic card was the only way to pay for something," said Kiki Del Valle, senior vice president and group head for social networks and operating systems at Mastercard. "In the digital world it's about facilitating new cardholder experiences in the environment of their choice."

The GM dashboard portal is expected to go live in early 2017, and will personalize content and functions based on the user, with machine learning enhancing the experience over time—a driver in Minnesota will get a different drink recommendation at a 55 degree temperature than a driver in Florida, Lloyd said.

Other potential uses include tapping into Watson Personality Insights and Watson's Conversation APIs to remind a parent to pick up diapers and formula before arriving at the pharmacy; or to tell a driver about restaurants fitting his or her tastes on a roadtrip.

Exxon will use the program to help drivers locate nearby Exxon and Mobil fuel stations, recommend fuel and other products for the car, and authorize payments from within the vehicle. Mastercard will enable tokenized mobile payments through Masterpass and the Mastercard Digital Enablement Service.

"With verbal commands, we want to create an experience that is far more human," Pena-Bickley said.

GM's OnStar enhancements will exist alongside other long-standing mobile payments innovations that have tangential ties to automobiles. Starbucks' mobile app and pre ordering service is not necessarily car-centric, though the brand relies heavily on drive-through business. And part of Uber's appeal is its easy mobile experience—payments happen almost entirely in the background.

While the new technology is inherently geared toward consumer use, more corporate auto use cases are possible, Lloyd said.

"It's indifferent to whether it's an owned or a rented vehicle," Lloyd said, adding GM's clients include fleet operators and businesses. "We are going to want to engage all of those models with this."

GM is using Watson evaluate contextual needs, said Tim Sloane, vice president of payments innovation and director of the emerging technologies advisory service at Mercator.

"This implies a technology issue related to analyzing clues such as voice, geography and ingesting other such clues," Sloane said, adding that for payment companies wishing to operate in this market will be challenged because most cues will come from non-payment apps such as Google Now, Apple's Siri or Amazon.com's Alexa.

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John Adams

John Adams

John Adams is Executive Editor of PaymentsSource.