The connected economy has hit the road, transforming what’s happening and turning all kinds of vehicles into endpoints for mobile commerce.
At the heart of it all lies the technology that underpins this transformation — and partnerships, too, between financial institutions, service providers and OEMs in an effort to disrupt everything from pay-at-the-pump to parking.
US chip maker Qualcomm said Thursday that its auto business “pipeline” has risen to $30 billion, an increase of more than $10 billion since its third-quarter results were announced in late July, Reuters reported. We note that the robust pipeline of chips indicates that there is a demand for manufacturers to build – as quickly as possible – the vehicles of the future.
For Qualcomm, the demand is in part related to the company’s own chassis Snapdragon digital product which is in turn used in the production supply chain – by equipment manufacturers and suppliers – to enhance vehicle connectivity. This connectivity enables everything from entertainment information delivered to passengers while they are in vehicles to self-driving and automated parking.
Partnerships between chip makers and automakers abound. In Qualcomm’s case, it is expanding its existing partnership with Mercedes Benz, the latter of which will use the Snapdragon Cockpit for its in-vehicle infotainment system starting next year.
Partnerships are also expanding beyond equipment and technology providers. The road to an interconnected economy on wheels has all kinds of stakeholders.
JPMorgan has reached an agreement with German carmaker Volkswagen to buy nearly 75% of its financial services unit — highlighting the allure of (and arguing essential) in-car payments technology.
Read also: JPMorgan acquires 75% of Volkswagen’s payments unit
Cars become devices
Max Neukirchen, CEO of JPMorgan, Merchant Services, told Karen Webster that the car “turns into a device,” connecting us to a range of activities, including payments. And we go beyond the segmentation of applications that have separate functions – to pay tolls, pay parking meters, etc.
As pertinent to the Volkswagen deal, Webster said the advanced technology will enhance OEMs’ direct connection to end users, but without having to do the heavy lifting of technology in enabling payments and aspects of commerce themselves.
Read more: Besides paying gas and transit fees, JP Morgan’s Max Neukirchen envisions an interconnected ‘happy’ economy on wheels
Unrest is emerging with other partnerships as well, which use technology to turn vehicles into point-of-sale (POS) terminals. In July, Sunoco said it would link to its Car IQ fleet payment solutions platform, which will allow secure fuel payments without a physical credit card. The initiative is being launched at nearly 5,000 Sunoco locations across the US As for mechanics, drivers using Car IQ Pay at Sunoco stations just need to enter the pump number, fill up and drive away.
As the connected economy evolves, open innovation — and open collaboration — will ensure the future and speed of mobility, said Kevin Mull, Director of Mobility Solutions at Bosch, in a recent conversation with PYMNTS CEO Karen Webster. Against this background, the lines between OEMs and OEMs are blurring.
We are not all that far from a future where the parking experience itself is fully automated, connected and contactless. Imagine the seamlessness when the driver arrives at the parking facility, navigates to the designated landing area, exits the vehicle and taps ‘Park’ in the smartphone app. The self-driving car takes off and finds its own parking space while the consumer walks away. (In this case, it may seem like Uber is on its way to some no-holds-barred, especially when it comes to getting to the airport.)
Read also: 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 business that will (literally) get us to run these mobile endpoints — and hook the commerce in the meantime. There is a positive multiplier effect that has a profound effect. PYMNTS data showed that a 10% increase in the use of digital tools in transportation and commuting use cases spurs activities in other use cases such as streaming, gaming, and even grocery ordering.
We are always looking for opportunities to partner with innovators and opponents.
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