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  • PayByCar

Verdeva Brings PayByCar to Market Via E-ZPass Agreement

Mobile Payments Today:

A Boston-based company has come to the market with a new twist on in-vehicle payments that uses a device already present in some 35 million automobiles on the road today.

Verdeva has struck a deal with the E-ZPass Group to link their PayByCar product to the same devices drivers already use to pay for highway tolls in 17 states. Consumers interested in using PayByCar can create a separate, non-toll account within E-ZPass to pay for gas, food and even automotive services at participating retailers.

Verdeva's approach to in-vehicle payments is much different than the smart dashboard integrations that often capture the imaginations of consumers at the annual Consumer Electronics Show. But the company believes this first-of-its kind agreement with E-ZPass will help consumers become more familiar with these kinds of transactions sooner rather than later.

"The reason we chose this route is because it's a low adoption hurdle for the consumer," Kevin Condon, CEO and founder of Verdeva and PayByCar, told Mobile Payments Today in an interview ahead of today's official announcement. "People generally understand how the [E-ZPass] concept works and what we're looking to do is rapidly develop ownership of that relationship between the driver, in-vehicle payment and the smartphone."

That's not to say PayByCar wouldn't find its way into smart dashboards in the future. Verdeva has had such discussions with car manufacturers. But for now, this works better.

"Our technology works with [Toyota] Corollas to Teslas," Anand Rama, the company's president and COO said during the interview, illustrating the agnostic nature of E-ZPass. "It doesn't matter."

E-ZPass already contains RFID technology, which Verdeva's PayByCar would depend on to conduct transactions.

When a PayByCar user drives up to a participating retailer, Verdeva's readers will recognize the E-ZPass inside the car, as well as the consumer's mobile number as a method of two-factor authentication.

Verdeva's system then authorizes and automates the payment via the consumer's funding source, which could be a credit or debit card, e-wallet and other methods. The company also plans to integrate with a retailer's loyalty program.

PayByCar will soon be available to use with a petrol retailer that has a larger footprint in the northeast, Condon said.

"We're going to set it up at three of their locations in central Massachusetts," he said.

Condon also said Verdeva is working with significant QSR chains. He's also having conversations with auto service chains and car insurance companies.

In each instance, Verdeva would integrate PayByCar into the retailer's existing point-of-sale system.

Verdeva's entry into in-vehicle payments comes at a time when the concept has been top-of-mind within the industry.

The past couple editions of the Consumers Electronics Show in Las Vegas featured companies pushing different concepts. Mobile Payments Today two years ago got a hands-on look at a concept between Honda and Visa.

A recent report from Technavio concluded the global in-vehicle payment services market is expected to grow at an CAGR of more than 195 percent during the period between 2017-2021.

"Automobiles are cornerstone of commerce," Jordan McKee, principal analyst of payments at 451 Research, told Mobile Payments Today in an email. "We buy things in them, we buy things for them and we take them to buy things. As such, it only makes sense that more vendors and service providers are exploring the opportunity at the intersection of automobiles and commerce."

McKee said one of the biggest challenges right now is the lack of sufficient technology in most vehicles to support transactions.

"Verdeva is taking a wise approach by leveraging current-generation hardware that is already installed in millions of vehicles around the country," he said.

McKee believes Verdeva could face some challenges as far a building out an ecosystem of retail partners, as well as convincing motorists that something like a PayByCar account is needed.

"Verdeva must make a strong case for not only consumer appetite and willing to engage in this type of commerce experience, but the potential ROI of its approach," he said. "While consumers may indeed be willing to transact in this manner, what remains to be seen is the impact it will have on visit frequency and basket size."

To that end, Verdeva does have what appears to be a multifaceted marketing approach that will include campaigns with each of the 17 E-ZPass states.

"It's going to be a rich and varied marketing opportunity for us and we're excited about that," Condon said.

For example, Verdeva could entice drivers without an E-ZPass to buy one and enroll in PayByCar when they receive a bill in the mail for an unpaid toll.

"We can offer those people a way to enroll," Condon said. "Even if they don't use it for tolls, they can use it for other things."

He said Verdeva also in in discussions with credit unions thanks to their local ties with communities in E-ZPass states. Condon added the benefit to a credit union's involvement with PayByCar is having that FI's card used as a funding source.

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