The connected economy is on the way, transforming what’s happening and turning all types of vehicles into mobile commerce endpoints.
At the center of it all is the technology to support this transformation—as well as partnerships between FIs, suppliers and OEMs in an effort to disrupt everything from paying at the pump to parking.
U.S. chipmaker Qualcomm said on Thursday that its automotive business “pipeline” increased to $30 billion, up more than $10 billion since it announced third-quarter results in late July, as reported by Reuters. We note that a robust chip pipeline shows that the demand is there for manufacturers to create – 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 is in turn being used in the manufacturing supply chain — by equipment manufacturers and suppliers — to improve vehicle connectivity. This connectivity enables everything from information and entertainment delivered to passengers while in the vehicles, to autonomous driving and automatic 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 its in-car infotainment system from early next year.
Partnerships extend beyond equipment and technology providers. The road to forging the connected economy on wheels has all kinds of stakeholders.
JPMorgan has struck a deal with German automaker Volkswagen to buy nearly 75% of its financial services division — underscoring the appeal of (and, we’d say, the need for) in-car payments technology.
Also read: JPMorgan acquires 75% of Volkswagen’s payments division
Cars are becoming devices
JPMorgan’s executive director of commercial services, Max Neukirchen, told Karen Webster that the car is “becoming a device” that connects us to a range of activities, including payments. And we’re moving beyond the fragmentation of apps that have separate functions — for paying tolls, paying for parking meters, and so on.
As it relates to the VW deal, he told Webster that advanced technology will cement OEMs’ direct relationship with their end users, but without having to do the heavy technology work of resolving payments and commercial aspects themselves.
Read more: Beyond paying for gas and tolls, JP Morgan’s Max Neukirchen envisions ‘delightful’ connected economy on wheels
Disruptions are also visible in other partnerships that use technology to turn vehicles into point-of-sale (POS) terminals. In July, Sunoco said it would tie up with fleet payment solutions platform Car IQ, which will enable secure fuel payments without a physical credit card. The initiative is rolling out to nearly 5,000 Sunoco locations in the US. In terms of mechanics, drivers using Car IQ Pay at Sunoco stations only need to enter the pump number, fill up their fuel and drive away.
As the connected economy evolves, open innovation — and open collaboration — will secure the future of mobility and drive it forward, said Kevin Mull, director of mobility solutions at Bosch in a recent conversation with PYMNTS CEO Karen Webster. Against this background, the lines between manufacturers and original equipment suppliers are disappearing.
We are not that far from a future where parking itself is automated, connected and completely contactless. Imagine the seamlessness as a driver pulls into a parking spot, pulls into a designated drop zone, exits the vehicle and taps “park” on a smartphone app. The self-driving car drives off and finds its own parking spot while the user drives away. (Uber, in this case, may seem to be aiming for some disintermediation, 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 that will have us (literally) powering those mobile endpoints — and connecting commerce in the process. It has a positive ripple effect that has a deep reach. PYMNTS data shows that a 10% increase in the use of digital tools in transportation and mobility use cases drives activity in other use cases, such as streaming and gaming and even grocery ordering.
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