The future of checkouts: Cash, credit or your car?

AUSTIN, Texas -- In the front seat of a Honda Civic, the clock is ticking.

Having paid for a parking spot with a credit card linked to his car, a driver returns to the vehicle and finds a digital readout on the navigation screen counting toward a two-hour time limit. He taps the Visa Checkout button to stop the clock and pay, then drives off without handing cash to a cashier or slipping a card into a slot.

For automakers such as Honda, which are determined to give owners a smartphone-style experience in their cars, this is a big part of the promise of the modern connected car. But turning a vehicle into a mobile payment device is still an elusive goal.

"We're making sure we understand the [user experience] and how our partners could implement it," John Moon, developer relations lead at Honda's r&d center in Silicon Valley, said in an interview after demonstrating a software interface that Honda designed with Visa. It was not linked to a real parking lot. That comes next. 

"The developer community is starting to understand that the connected car is here, and it's real," Moon said. 

Over the past two months, Honda and Visa brought the Civic to two of the world's largest gatherings of software developers: the Mobile World Congress in Barcelona, Spain, and the South by Southwest arts festival here, which features a technology conference. 

They were hunting for partners. Now they're working with companies such as Chicago's ParkWhiz, which lets customers reserve a parking space from a smartphone. 

Outside the auto industry, interest in mobile payments has exploded with the introduction of Apple Pay, Android Pay and Samsung Pay, which let customers make payments by tapping a sensor with a smartphone linked to a credit card. 

Consumers are likely to make $1 trillion in mobile payments in 2017, up from about $500 billion in 2015, the consultancy International Data Corp. said in an August report. 

Those services rely on near-field communication, which requires a phone to be just a couple of inches from a sensor. 

No such standard has emerged for cars. 

Without a standard, few parking lot owners or fuel station operators would be willing to add the infrastructure needed to process payments. 

"It will take some time," said Vasiliy Suvorov, vice president of technology strategy at the Swiss company Luxoft, which specializes in software for the financial industry. "There's a challenge in infrastructure, there's a challenge in common standards and there's a challenge integrating it into the car." 

Luxoft, which has a team in Stuttgart designing software interfaces for luxury cars, is working on this challenge. Suvorov said he expects early use of in-car payments in about three years and wider use in about five years. 

One area in which in-car payments are widespread is tolls. 

Toll collection agencies have a strong financial interest in reducing the number of workers manning booths. Parking lots, drive-through restaurants and fueling stations would need to see a similar potential payoff before committing to build the needed infrastructure. 

If the auto industry moves too slowly, it risks ceding that payoff to smartphone companies. While working with Honda, Visa also is working with Chevron to add Samsung Pay sensors to pumps at six fueling stations in California.