MOBILE APP AND IN-VEHICLE PAYMENTS TO ACCOUNT FOR 35% OF $4.7 TRILLION MOBILITY PAYMENT MARKET IN 2025
DISRUPTIVE PAYMENT SOLUTIONS FOR PUBLIC EV CHARGING, PARKING & REFUELLING WILL SEE $1.6 TRILLION SPEND IN 2025
London, July 20th 2021: Mobile app and integrated in-vehicle payment solutions will account for 35% of global transaction value for public EV charging, parking and refuelling by 2025, finds fintech and payments research specialists Kaleido Intelligence. This is equivalent to over $1.6 trillion in annual spend.
According to Kaleido’s new report, Frictionless Mobility Payments 2021, in-vehicle payment transaction value is set to grow by 136% CAGR between 2020 and 2025, driven by vehicle OEMs’ increasing efforts to monetise embedded connectivity in their vehicles.
Unified Approaches Must be Adopted
Mobile app use for mobility payments is already relatively common in Western markets and pockets of East Asia & Pacific, particularly in the parking segment. However, the demand for seamless EV charging and refuelling payment mechanisms will spur mobile app payment adoption in these segments, particularly while the penetration of vehicles with integrated payment platforms remains low.
Nevertheless, Kaleido found that while mobile app and in-vehicle mobility payment solutions represent a new phase in consumer convenience, fragmentation across payment segments remains high, with few unified platforms. This is exemplified by the large number of parking and smart parking players, in addition to a range of EV charging network providers. Meanwhile, vehicle OEMs have failed to adopt a user-friendly approach to customer onboarding, which has slowed traction for in-vehicle payments.
Steffen Sorrell, Chief of Research at Kaleido Intelligence commented: “Consumers want convenience, but ultimately suffer from app fatigue and on-boarding challenges which is hampering traction for innovative mobility payment growth. Payment players must take a collaborative approach to facilitate a more homogenised experience for the driver, whichever parking, EV charging or refuelling actor receives their dollars.”
Contactless Card & OEM Pay to see 26% CAGR
The challenges surrounding mobile app and in-vehicle payment solutions will mean that payments using contactless card or OEM Pay wallets will outpace their growth between 2020 and 2025, registering a 26% CAGR. By 2025, just under $1.3 trillion will be spent using contactless payment mechanisms. In part, this will be driven by regulation, such as the EU’s mandate to enable open-loop payments at all public EV chargers, in addition to the impact of COVID-19 and ever-growing use of QR payments in countries such as China.
Kaleido predicts that 35% of public EV charging spend and nearly 30% of vehicle refuelling spend will be accounted for by contactless payment mechanisms by 2025.
Steep Decline for Legacy Payment Methods
Meanwhile, Kaleido has forecast a steep decline for legacy instruments used for mobility payments. While cash, traditional credit and debit cards and similar instruments saw over $2.2 trillion in spend in 2019, these are forecast to fall well under $2 trillion by 2025, accounting for only 38% of public EV charging, refuelling and parking spend in that year. Naturally, this decline is most likely to occur in developed Western markets: the US, for example, is forecast to see a 74% decline in cash and traditional card spend for fuel between 2016 and 2025.
About Kaleido Intelligence
Kaleido Intelligence is a specialist fintech and payments consulting and market research firm with a proven track record delivering fintech and payments research at the highest level. Research is led by expert analysts, each with significant experience delivering fintech research and insights that matter.
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