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Software-Defined Cars Give New Meaning to “Auto Pay”

AUTOMOTIVE / 08.28.23 / Steve Kovsky

The days of digging out your wallet at a gas station or drive-through window may be numbered. While the experience of having your car drive itself to its next destination still beckons, the experience of having it pay for itself appears to be close at hand.

The car’s owner will still be footing the bill, of course, but the hassle of making a physical payment is ready to disappear into the vast array of capabilities made possible in the new generation of software-defined vehicles (SDVs). Empowering your vehicle to pay directly for roadside conveniences and in-car services — requiring little or no user input — offers new levels of both convenience and security. 

A year ago, the idea of automated car payments was in the conception phase. Now it’s available in the market, and already delivering benefits to customers.

Welcome to Season 2, Episode 7 of “Get In: The Software-Defined Vehicle Podcast from BlackBerry.” This series explores the possibilities created by — and technologies behind — the revolution in automotive we are witnessing today. In this episode, we revisit the 2023 Consumer Electronics Show (CES) in Las Vegas to talk to Sterling Pratz, chairman and CEO of Car IQ, about how his company’s platform has moved from conception to reality and is now delivering automated car payments to thousands of users.

Click to watch Season 2, Episode 7, (below):

Automated Car Payments Move from Concept to Rollout

“When we first met at CES last year, we had just started integrating with BlackBerry,” says Pratz. “The concept of how to drive a payment directly from the car was very new. Vito Giallorenzo, [senior vice president and general manager of BlackBerry IVY], and I were still trying to figure out all the things you could do with it.” 

Since then, the Car IQ system has been refined and rolled out extensively. “We've gone from hundreds of test vehicles making payments with just one fuel provider to now having completed tens of thousands of payments. We have real customers in the field using it and giving us feedback every day. We've moved out of that early concept period of development into a real commercial product experience. That's been a big change for us in working with BlackBerry.”

BlackBerry® originally approached Pratz with the concept of allowing his payment systems to access synthetic sensors that had been developed for the car. As Car IQ developed its platform, BlackBerry liked the results so much that it invested in the company to help shape the roadmap more directly with its extensive expertise. The Get In Season 1 podcast episode with Car IQ outlines the disruptive potential of this technology, with many possible applications. However, the core function at present is fuel payment.

Top Five Expenses Vehicles Can Automatically Pay

“Fuel is the bread and butter of the whole thing,” explains Pratz. “When I started the company, the concept was that cars are driving around looking for things to pay for, and it's a big market. Inside that market, we realized fuels are 50% of it, but transactions are around the car for tolling, parking, insurance, service, and repair. We see those as the ‘Big Five.’ EV (electric vehicle) charging is part of the fuel category.” Car IQ has begun to chase relationships in all five of these areas, but fuel is the most fully established payment category to date.

“Today, we've got 25,000 gas stations on the platform, and now integrating over the road (OTR) we'll soon have about 50,000,” Pratz states. “We just started (with) tolling.” To facilitate this, Car IQ has signed a deal with Verra Mobility™, which provides integrated technology to manage things like tolls for vehicle fleets and government customers. “Verra saw our technology at the show last year and said they'd really like cars connected to their tolling agencies. That gives us about 95% of the U.S., and then we're moving after insurance next. Those are two of the bigger ticket items.”

The recent fuel crisis accelerated the adoption of Car IQ’s technology. 

“As soon as gas started hitting $5 per gallon, the fleets decided they needed to get smarter about fuel cost management,” says Pratz. “The biggest challenge they had was they typically have five to ten credit cards they use across all their fleets to pay for fuel, tolling, parking, you name it. That database management was hard for them. On top of that, they were suffering from fraud. They didn’t know where the leakage was, but they knew it existed. We could not only centralize the payments in one location for them, but we also gave them more visibility into the transactions. Because the (Car IQ) system is so secure, they could now trust it to eliminate fraud. This includes things like ‘friendly fraud,’ man-in-the-middle scenarios, and the disputes that they have problems with.”

Fraud prevention is a key area where switching to automated payments can cut costs. “If you read quarterly reports from some of the big card providers, they'll tell you openly that there's 3% to 7% fraud,” Pratz continues. “Then they’ll also tell you on the side, there's another 4% to 5% of ‘friendly fraud’ that they can't really track. For instance, we have customers seeing Priuses pay for 50 gallons of fuel, when that car only has a 9- or 11-gallon gas tank. Our system now gives the fleet much more visibility into the transaction, which can eliminate that. For instance, when a vehicle now drives into a gas station with us, we automatically know it's there. Not only do we validate the vehicle as who it says it is, but we can also scan its gas tank, and we can tell the fleet owner, the bank, and the merchant how big the tank is, how many gallons are in it, but also the maximum risk of the transaction. Then we secure that transaction for them, turn the pump on — and we do that in milliseconds,’ Pratz explains. 

“For everybody who's concerned that security takes too much time, the reality is, they don't even feel it. But it's there.” This seamless operation, powered by the capabilities of BlackBerry IVY®, has enabled rapid expansion for Car IQ’s user base. BlackBerry IVY is a cloud-connected automotive AI platform, co-developed with Amazon Web Services (AWS). This ground-breaking platform is designed to enable automakers to rapidly deploy innovative third-party applications that enhance the in-vehicle experience for drivers and passengers alike — while enhancing safety, security, and consumer privacy.

“Now we've got thousands of customers using Car IQ, and they're across a broad distribution of types,” says Pratz. “That feedback is also helping us build a better product.” 

This rapid expansion is taking Car IQ into its next phase. “This year is focused on scaling. We've now signed some of the biggest fleets in the United States, who are converting over to our platform. We have two automotive OEMs (original equipment manufacturers) that are also adding us to their platform. We're very focused on integration with these key customers and scaling. 

“We're also now starting to add merchants, so we've got several large Tier One fuel providers on the platform. We are close with one of the largest EV providers for charging, and we continue to grow that and add to the customer base. Customers are using our platform to remove credit cards and use the car — they want our single ledger to manage all of their vehicle payments in one place."

Pratz sees great positivity in how quickly EVs are going mainstream. “It's not just about Tesla anymore,” he states. “It's about Rivian and other manufacturers putting products out on the market. But they do need more access to EV charging stations. They need to make that more ubiquitous like a fuel station is. You're starting to see that with companies like Blink and ChargePoint, which are now spreading out across the country and giving customers more options. EV charging is becoming more ubiquitous.”

Although Car IQ’s technology is currently focused on the United States, there is global potential as well. “We're having a tremendous amount of interest coming from the European Union,” Pratz confirms. “Primarily this is Italy, Spain, France, and Sweden, where shipping and transportation are important. These fleet operators and fleet management companies want to start simplifying their payment platforms using us. We're focused on the U.S., and we're starting to move into Canada,” he adds. “Then we're going to start looking at moving into Europe.”

The rapid growth of adoption of Car IQ’s technology is a testament to the value of this design-led approach — making automated car payment simple and seamless.

Listen to Season 2, Episode 7 of “Get In: The Software-Defined Vehicle Podcast from BlackBerry," (below): 

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Steve Kovsky

About Steve Kovsky

Steve Kovsky is former Editorial Director at BlackBerry.