„Why shouldn’t cars be able to do what smartphones have long been able to do?”
Nico Kersten, CEO of Mercedes pay, talks about In-Car Payment and how Mercedes-Benz drivers will soon be able to get a latte macchiato faster on the road with the help of artificial intelligence.
Nico, when was the last time you bought something and paid from your car?
I pay for my fuel directly from the car all the time. Just recently, I had to wait in line at the cashier because I needed windshield washer fluid. My little son in the car was completely confused by that. 'Daddy, why are you going into the gas station?' He's not used to it anymore.
Do you believe that In-Car Payment will catch on quickly?
I'm convinced of that. Why shouldn't cars be able to do what smartphones have long been able to do? We download lots of apps to our cell phones to play games, shop, get information or chat. Many of them can already be used in the car. Software, voice recognition, camera, MBUX infotainment system - our vehicles are equipped with all the technical possibilities. We want to use them, but above all, so do our customers. And we want to make it as easy as possible. That also and above all applies to payment.
What is the biggest advantage for customers?
We combine all payment processes in a single device, the car. You order something via the display in the vehicle and no longer have to confirm the purchase on your smartphone. The 2-factor authentication required for online purchases in Europe is now fulfilled by the car and the fingerprint.
And is that secure? I'm thinking of hacking attacks where customer data gets stolen.
We meet the same high security standards as traditional online retailers. Furthermore, credit card data is not stored in the car. For each individual transaction, the data is always transmitted only as anonymized tokens.
Does Mercedes-Benz open up new business fields with Payments?
In addition to app and web-based stores, In-Car Payments are turning the car into another sales channel - a very emotional one, in our opinion. After all, there's nothing simpler and nicer than using the product I'm using to do something to pay for it at the same time. After all, I drive to the gas station in my car and type in my destination on the navigation system beforehand, so why not pay right away with just a few more clicks using the steps I've already learned on the display? We are now gradually expanding our business model with digital applications, including integrated payment options.
Can you provide more examples?
Fueling, parking, charging - we're starting with vehicle-related services that our customers need every day. They could also search for and pay for these through a smartphone. However, with our system, they don't need to dig out their phone and tap on it to authenticate the purchase. A touch on the car's fingerprint sensor is enough to complete the process. This is an added value for Mercedes-Benz drivers that enhances the customer experience. The options for individually customizing vehicles by adding digital extras also play a role in the customer experience. These are particularly interesting for second or third owners.
Unlike fueling, payment is made for parking or charging without any customer approval. Does the customer have to enter into multiple individual contracts and subscriptions with various operators for this? Isn't that complex?
Certainly not. The customer simply enters into one parking or charging contract. This can be done conveniently through our Mercedes me app and their personal Mercedes me account. They only need to input their payment details once. With this, they can park or charge at all participating partner locations and the car handles the payment.
Does this work comprehensively, or are there only a few partner companies that participate?
The customer will adapt this only if they can actually use it in many places. That's why we are constantly entering into new collaborations. For example, our charging service Mercedes me Charge has one of the largest charging networks, with over 1,000 charging station operators integrated worldwide. In Germany alone, Mercedes-Benz drivers can already charge their electric car at over 34,000 locations nationwide, and the car takes care of the payment in the background. To put this in perspective, there are currently around 14,500 gas stations in Germany.
By the way, are gas station operators just as willing to cooperate?
Currently, you can pay from your Mercedes-Benz at around 3,600 of the total 14,500 stations in Germany. This number is increasing. Via Fuel & Pay, the navigation system filters out the partner gas stations. If demand increases, the supply will not only rapidly expand for refueling. If a gas station operator notices that the competitor across the street is attracting Mercedes-Benz drivers, they will react and join us.
One might see this as unnecessary gimmickry.
I see it differently. Everyone has a different idea of excellent service. Let's take the driver with a child in the back seat. They're usually in a hurry, neither wanting to stand in line at the checkout with their child, nor wanting to leave their little one alone in the car. Quickly driving to the pump, refueling, confirming, and they're off.
Is in-car payment also conceivable for services that are not directly connected to the car?
Modern cars have screens in all seats. If the passengers are bored on a long car ride, there is already the option to book entertainment and pass the time - and it's on-demand, with a click. We are very excited about further developments in this area.
Mercedes-Benz is already integrating ChatGPT into vehicles in a beta version in the US. Could artificial intelligence also play a role in In-Car Payment services in the future?
Good question, you can imagine many things here. The system could remember that I order a latte macchiato from my favorite coffee house chain every morning on my way to work from my car. If I drive a completely different route, the car could nudge me: 'Hey, in ten minutes we'll be passing a branch of xyz. Shall I order you a latte macchiato?' And because the car tells me the exact time of arrival, the hot coffee I've already paid for is ready on time at the fast lane of the drive-in counter.
That sounds a bit spooky. Not everyone might be able to cope with that.
We deal with new technologies every day. Just think of the smartphone. At the beginning, I also thought: 'Why apps? After all, I can enter the web address in the browser'. Today, everyone has dozens of applications on their cell phones, which basically just make things faster and easier. I think this is a generational issue. Some people are amazed by such possibilities. These are the early adopters who talk to their cars, control everything by voice and try out every technical possibility. Others are only slowly getting to grips with new technologies. Our task now is to find a good and sensible balance between what is feasible and what the customer wants.
Are there software-driven features that you can pay for from the car, so-called vehicle upgrades?
Certainly, we have integrated all items from the Mercedes me Store into the payment system. Customers should be able to purchase our digital extras, such as advanced navigation services, on all channels. In the car, just like on the computer or via smartphone.
What kind of upgrades are already available, and what is in the pipeline?
You can already upgrade many features of a Mercedes-Benz. For example, you can book a larger steering angle for a vehicle with rear-wheel steering. Or choose a colored interior lighting. The software is simply updated over the air. And many new features will be added over time.
Do you believe that customers would also make expensive purchases in the car?
Why not? When you're at the charging station, you have time to browse our shop. No one wants to wait for a long time, they would prefer to try out the new feature right away. One click, and the upgrade starts. If it doesn't require a huge amount of data, you could experience things like the new active Distance Assist DISTRONIC or the entertainment package within a few minutes.
Mercedes-Benz is currently a pioneer in the field of vehicle-based payment systems.
And we're extremely proud of that. However, we hope that other manufacturers will follow quickly. That will accelerate development and expand the range of products. But for now, we're looking at the entire infrastructure where we can be active. How fast and how well do the processes work? Which are the right use cases? How exactly should the payment process be?
But in the end, the customer has to pay for it, right?
Mercedes-Benz doesn't charge extra for the payment system. Our customers wouldn't accept that. However, we have no control over whether a third-party provider charges a fee for an online purchase. But that fee would also apply when purchasing via phone or computer.