Authenticated machine-to-machine transactions will be possible in the connected ecosystem of tomorrow using machine-native wallets.
You don't need anyone.
It's Sterling Pratz's vision of a future where machine payments will account for more than 80% of all transportation, according to Karen Webster, CEO of PYMNTS.
Through Car IQ Pay, cars can benefit from a trusted identity and secure payment capabilities, allowing them to use their credit cards for fuel, parking, tolls, and other transactions without having to deal with credit card companies directly.
It's important to take a closer look at what's inside the wallet than what's in it, says Pratz. "In our case, we've gone beyond storing money and have provided value to people," says Pratz. There are actually purses inside each wallet, and each purse can do different things: a loyalty rewards purse, a payments purse, a driver incentive purse, and you can add value to each purse individually.”
It is estimated that by 2030, the connected vehicle payment market will reach $600 billion and vehicles will be able to control purchases in real-time.
The CES 2023 show marked the first time Car IQ partnered with BlackBerry Limited for OEM (original equipment manufacturer) integration that will enable cars to transact directly from the instrument panel. Following its successful Series B fundraising, this company is capturing the interest and imagination of the vehicle and payment industries. Among others, Visa, Bridgestone, Navistar, and Circle K contributed to the company's Series B, led by Forte Ventures.
Integrated Services
The connected car trend continues to gain traction, and vehicles are becoming shopping malls with embedded payment systems, enabling transactional payments from inside the vehicle.
Essentially, it's a one-stop shop right in the dashboard," Pratz says. In our opinion, that's what makes it revolutionary - previously, any payment into a car has required multiple steps. Merchants have their own apps and credit cards are associated with each app and merchant. We don't have to worry about any of that. Drivers automatically pay at gas stations and toll booths whenever they enter a gas station. The process is even simpler for electric vehicles because they can automatically scan the charger, determine the merchant, transfer data, and pay. At the end of the process, the driver simply plugs it in and drives away."
Single payment and simplicity are at the core of the Car IQ business philosophy, he said.
Through Car IQ's proprietary technology, we establish vehicle identity and make it simple for you to identify your vehicle.
A key feature of our platform, Pratz said, was the ability to surface all the data around a vehicle prior to a transaction, so investors could gain a full understanding of not only the vehicle but also the risk involved in the transaction. We can identify a car that enters a gas station, for example, with certainty, not only by scanning it and providing the vehicle's identification number but also by identifying the vehicle's tank size. This data is then used to inform both the bank and the merchant of the transaction's maximum risk. Therefore, instead of underwriting $150 per transaction, we inform the bank and merchant that, for instance, based on a minimum requirement of five gallons and a rate of $6 per gallon, this transaction is a $30 risk. They don't have to take out $150 from their Treasury side to underwrite - instead, they only have to take out $30 and put it into escrow. That frees up their cash."
As a result of Car IQ's ability to support this kind of variable rate underwriting, Pratz said people are "really excited" about its innovative way of utilizing identity to trigger payment triggers.
Specifically, “we’re looking at how identity can be woven into services so that they are easier to use,” he explained. By using identity, we can automate everything: the payment workflows between the bank and the merchant and the customer, thus reducing the number of steps involved in payment processing. It takes around 11 steps for a payment to go from acceptance to issuance, plus some manual tasks."
This process can be automated, Pratz says, with Car IQ's product.
Pratz tells PYMNTS' Karen Webster it's no longer just a pipe dream. The capability is there right now. This fundraiser will enable us to bring things to market in a big way."
As a leading independent research provider, TradeAlgo keeps you connected from anywhere.