Credit Card Companies Boost Interest in Mobility Finance
Mastercard is expanding its relationship with General Motors Co., to allow for online payments for multiple services — including Maven carsharing — evidencing that credit card companies are beginning to understand that mobility finance is the next frontier for revenue.
And those companies that do not collaborate with mobility services will be behind the times, Grayson Brulte, president of Brulte & Co., told Mobility Finance.
Credit card companies are recognizing the financial opportunities within mobility. Mastercard, for example, is involved in many mobile services and even works with Uber and Lyft to help drivers get paid faster, a Mastercard spokesperson told Mobility Finance.
Mastercard and General Motors initially began their partnership in 1992 with the GM Rewards Card program where customers could use their cards for everyday purchases and earn points that could be used toward purchasing a GM vehicle. Now, that partnership has expanded to allow any credit card holder to order and pay for service parts and accessories, Maven carsharing services, OnStar guidance, security and data plans, and OnStar Go, using Mastercard’s payment gateway, the companies announced on Tuesday. The gateway enables fast and secure electronic credit and debit card processing for any major credit card.
For OnStar Go, the idea is that drivers can pay for everyday items from inside their vehicles, through the OnStar Go enabled dashboard.
“The overarching thing you are seeing in the marketplace is when paying for carshare services, ACH [Automated Clearing House] and checks are going away,” Brulte said. “We are moving to a cashless society.”
Transactions involving credit cards or ACH are both electronic funds transfers (EFTs). However, ACH draws on funds in checking or another similar bank account. In theory, there may not be enough money in a person’s account to cover an ACH, while a credit card guarantees funds to the merchant (within a person’s credit limit). With a credit card partnership, mobility companies are setting themselves up for future ongoing payments.
GM will likely roll out an autonomous subscription service based on its Cadillac by Book monthly subscription program, Brulte said. And when it does, it will be based on credit cards — no more ACH bank payments or lease payments.
This is currently seen with partnerships that American Express has with both Uber and Daimler.
“American Express has a longstanding partnership with Uber,” Leah Gerstner, vice president of public affairs and communications for Amex, told Mobility Finance. “Members can earn 2-times Membership Rewards points on U.S. rides when using an eligible American Express Card.”
American Express also has an exclusive in-app experience for its Platinum Card Members, she said, where members receive Uber VIP status automatically and can unlock exclusive perks, discounts, and giveaways where available.
For Daimler, there are two separate American Express programs in the U.S. available through Mercedes-Benz and Mercedes-Benz Financial Services, which both launched in 2011.
And in Germany, Daimler offers a MercedesCard through Visa, which has bonus offers for car2go customers. In this case, car2go is integrated into the MercedesCard where registration and the first ride are free, Mary Beth Halprin, director of corporate communications for Mercedes-Benz Financial Services, told Mobility Finance. Additionally, customers can redeem bonus points for car2go credits in the MercedesCard bonus portal.
“If you go to Amex.com/travel, and book a car or flight, you get 5-times points,” Brulte said. “Will you see that if you sign up for mobility subscription service? Will you get those bonus points every month? When you start talking 5-times extra points, that’s a healthy way to drive consumer adoption of mobility services.”