Drivers will soon be able to leave their wallets in the back seat, as Car IQ is hatching a plan with BlackBerry to create an autonomous and highly secure payment system for connected cars.
The system will connect BlackBerry’s intelligent vehicle platform IVY with Car IQ’s artificial intelligence-based authentication technology to create a kind of “digital fingerprint” that will allow cars to make payments autonomously.
Car IQ’s platform will serve to verify vehicles each time a payment is made to reduce the chance of fraud or transaction disputes, BlackBerry said.
Each car will have its own digital wallet, which Car IQ will connect to a bank’s payment network. Using the digital fingerprint, it will be able to validate and pay for everything from gas to road tolls, parking meters and maintenance.
Read more: Connected Economy 2021: Car IQ Turns The Car Into A Connected Commerce Platform
BlackBerry, once renowned for its highly secure phones, has pivoted away from the handset industry in recent years to focus on software and services. The company describes IVY as an embedded automotive software platform, but in reality it can be thought of more as an application store for vehicles.
Built in partnership with Amazon Web Services, IVY is platform-agnostic, designed to be compatible with different vehicle manufacturers. It’s able to tap into and analyze the data generated by hundreds of vehicle sensors.
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Meanwhile, Car IQ is getting a lot of attention for its contactless payment system that enables connected vehicles to pay for goods and services on the road without the need for a physical credit or debit card or additional hardware. The company this week announced it had secured $15 million in an oversubscribed Series B funding round led by Forté Ventures.
Further reading: Fleet Payment Startup Car IQ Raises $15M Oversubscribed Series B
Car IQ’s Know Your Machine system is analogous to the Know Your Customer (KYC) process used by banks to identify individuals. It works by tapping into the hundreds of individual sensors within a connected car to verify that the vehicle is the actual car or truck it says it is.
“We realized that machines have these attributes that are much different than a human, and that you can look at the data inside of a machine and correlate that data to exactly who that machine is and what it is,” Car IQ Chief Executive Sterling Pratz told PYMNTS in January. “We actually associate the data that the machine is composed of, and we’ve developed very complex algorithms to help us look at the behavioral identity of that machine. And that allows us to connect that machine directly to banks and payment networks securely.”
Car IQ was gaining traction even before today. Last September the company announced it was working with Discover to create an automotive banking system that will see the Discover payment platform leverage Car IQ’s technology.
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“We are delighted to partner with Car IQ to demonstrate the value that BlackBerry IVY’s end-to-end offering brings, as well as the exciting, disruptive technologies that IVY can enable,” BlackBerry Vice President of IVY Product and Ecosystem Peter Kirk said. “In-vehicle access to sensor data and edge computing allows Car IQ to offer an incredibly secure solution for payments in vehicles and a lucrative opportunity for automakers.”
Analyst Holger Mueller of Constellation Research told PYMNTS the system Car IQ and BlackBerry have outlined would be attractive to any bank or payment provider, because it will work well and they all want a piece of any new action.
“Using your car to pay will not only be convenient, but good for economies and environments,” Mueller said. “Just consider the pay tolls at highways in many countries, getting take-out delivered to your car in seconds, or paying for parking hassle free. That requires broad platforms like BlackBerry and Car IQ are building.”
The connected car payments market promises to be very lucrative. A September 2020 report from Juniper Research forecast that $86 billion will be spent on in-car commerce by 2025. That’s a whole lot of gas filling up a whole lot of cars.
A big chunk of the revenue from connected car payments will be generated by commercial fleets, which have already been identified as a plump target by Car IQ. Though CarIQ promises its system will be made available to individual drivers, it may find more immediate appeal with haulage and delivery firms, for example. That’s because it helps to eliminate the standard practice of drivers using company credit cards or paying out of pocket when filling up or getting a vehicle serviced.
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Pratz told PYMNTS in January that Car IQ actually started with the idea of making payment management easier for fleets of vehicles.
“Believe it or not, today a lot of huge fleets are managed with simple CRM tools and Excel spreadsheets, and so expense and payment management becomes a really daunting task,” he said. “You have to validate that all expenses were real, and you’ve got to accrue any credit card costs or payment costs. And then it takes a fleet or people to write checks and make payments.”
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