Mercedes Pay turns vehicles into payment devices

German car manufacturer add contactless payment feature to enable drivers to find and book parking spaces and pay automatically when they arrive

Mercedes-Benz has introduced Mercedes Pay to enable customers in the US to use their vehicles as a device for booking and paying for off-street parking.

US vehicles equipped with the Mercedes-Benz User Experience (MBUX) infotainment system will be able to find and book parking spaces and automatically pay when they arrive. Parking service provider Parkopedia provides data about parking spaces. The MBUX system is controlled by voice, touch or gesture.

Mercedes Pay USA CEO Jana Breitkopf said: “Our goal with Mercedes Pay is to provide a seamless and exceptional customer experience across payment touchpoints within the Mercedes-Benz ecosystem. This new feature addresses a major customer pain point – parking – and we’re going to make that experience a lot easier for Mercedes-Benz customers.”

The German car maker’s connected car service means customers in the US no longer have to use a separate mobile app to find and pay for parking. Drivers can use MBUX to select check-in and check-out times, view the total cost and confirm their booking. A QR code will be sent to them, which they can scan when they arrive at the car park, payment processing is then enabled automatically by Mercedes Pay.

“Mercedes Pay ... addresses a major customer pain point – parking – and we’re going to make that experience a lot easier for Mercedes-Benz customers”
Jana Breitkopf, Mercedes Pay USA

The connection of vehicles to mobile networks is a growing internet of things (IoT) trend. According to a recent study from Rethink Research, 828.7 million cars will be connected to mobile networks over the next seven years – three times more than in 2022, when 279.3 million were connected.

And connected cars could be a boon for other sectors, including financial services. Beyond turning cars into payment devices, insurers are also offering products. Insurance is one of the biggest revenue earners from car connectivity, tapping an already massive revenue base. Connectivity could also stimulate the already growing field of usage-based insurance, such as pay-as-you-drive and pay-how-you-drive models.

Another tech trend being boosted by developments in connected cars is contactless payments, which is rapidly becoming the default for in-person payments. Contactless payment use exploded during the Covid-19 pandemic as consumers avoided physical contact when paying for goods and services. In the UK today, almost 90% of face-to-face payments are made through contactless transactions. According to numbers from Lloyds Bank, 65% of face-to-face payments were made using contactless debit cards in June 2019, which was pre-Covid, but by June 2022, this had reached 87%.

The popularity of contactless payments has continued to increase since the pandemic and shows no sign of abating. 

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