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The payments industry loves to throw around the word innovation.
We hear it so much that some of us have a hard time determining whether a product is a breakthrough that will alter this particular corner of the market and bring true upheaval with it.
At least that's how I view things at times.
When you're at the Consumer Electronics Show in Las Vegas, innovation is supposed to be all around you. From televisions to cars to virtual reality and little knick knacks and doodads, companies scream that their products are innovative. Some are, while others fall short in the long run.
I'm still trying to determine if what I saw at Honda's booth with in-vehicle payments is a breakthrough. A couple of factors, including consumer adoption and ubiquity, will play into the determination whether this concept can be a success.
If you missed the original announcement, Honda revealed at CES that it was conducting the first proof-of-concept demonstration of in-vehicle payments for parking and fuel. The demo was part of Honda's ongoing partnership with Visa.
I stopped by Honda's booth to see the demo. If it translates well to real-world situations, then we can view this concept as a breakthrough, maybe even an innovation. In-vehicle payments would address some pain points for consumers in paying for fuel and parking. Who wants to fumble with a card in Chicago when the temperature is in the single digits?
It's easy to envision other use cases, as well.
One of the lasting images from Apple Pay's launch more than two years ago was a photo showing the ridiculous procedure for completing transactions at a McDonald's drive-thru window.
In the picture, the cashier is holding a standard point-of-sale device out the window as a customer hovers an iPhone over the reader. Talk about something that's not seamless. This was it. I wonder how many consumers have actually used Apple Pay at McDonald's in this way.
But something such as this Honda-Visa partnership eliminates the aforementioned silliness if the right partnerships are made.
Both companies are working with Gilbarco Veeder-Root (a fuel pump manufacturer) and IPS Group (a parking products provider) to install beacons that will communicate with a Honda via Bluetooth in order to complete payments through a Visa Checkout integration with what's essentially a "smart" dashboard.
Honda and Visa should work with restaurant technology providers to install beacons at drive-thru windows. That would make paying for a Big Mac much easier.
One of the issues that will decide the success of the eventual rollout of this system is ubiquity.
Honda and Visa don't have a time frame as to when in-vehicle payment will be available to the public. And even then, it might not be a standard feature.
"Although the technology will likely be a standard feature in upcoming Honda cars like the NeuV, it is not necessarily going to be part of that exact model (again, though it likely will be)," a Honda spokesperson wrote in an email to Mobile Payments Today. "The feature will be through a smartphone connection to the car."
Consumer adoption is another obstacle. At the end of the day, the consumer still needs to activate the feature. Honda and Visa will need to educate drivers and show them why in-car payments are beneficial to them.
And there's still the problem of acceptance.
For fuel pump operators, adoption should be a no-brainer. If a driver only has to interact with the actual fuel dispenser at the gas station, why wouldn't an operator want this? But again, Honda and Visa didn't have any concrete partnerships to announce at CES.
I imagine the companies also would need to work with individual cities through IPS Group to add Bluetooth capabilities at parking meters. The good news there is that beacons are inexpensive devices.
I don't think consumers will buy a Honda for in-vehicle payments because other car manufacturers are sure to copy the idea and seek partnerships with Visa (I expect MasterCard is looking into in-vehicle payments, as well). The beauty with the card networks' respective tokenization programs is that it's easy to add payment credentials with an API to almost any connected device, cars included.
But whether consumers find real value in such capability — and enough places to use it — ultimately will determine its success.