Ford Motor Company has entered into a five-year agreement with Stripe to provide payment processing services for Ford and its dealers across North America and Europe. Ford’s goal is to enable a seamless digital and e-commerce experience for customers, and offer dealers improved payment acceptance capabilities.
“We have been working with Ford to reimagine our e-commerce payment infrastructure. Stripe’s platform will help us deliver simpler, outstanding payment experiences in any channel customers choose and scale improvements faster,” said Marion Harris, Ford Motor Credit Company CEO.
As Ford develops e-commerce offerings across the product and service spectrum, Stripe’s platform will be a key part of Ford’s tech stack. For Ford and Lincoln dealers offering digital payment services today, Stripe’s service is expected to drive new efficiency into processing of e-commerce payments, such as vehicle ordering, reservations, and digital and charging services.
“We’re thrilled to be the payments engine under the hood powering the next stage of Ford’s digital transformation,” said Mike Clayville, chief revenue officer at Stripe. “During the pandemic, people got comfortable paying online for groceries, health care, even home haircut advice from barbers. Now, they expect to be able to buy anything and everything online. Ford is making e-commerce possible, too, and scaling that strategy with Stripe’s help.”
Neither company commented on whether this new agreement would facilitate in-car payments as well. The ongoing microchip shortage has car makers rethinking their marketing and manufacturing strategies, which may include pay-as-you-go options on autos. The current legacy manufacturing strategy identifies certain features as options that the consumer can specify when the car is built. Even though the use of common wiring harnesses, etc., has somewhat simplified the manufacturing process, it is often cost-prohibitive to equip a car with options like heated seats and navigation after it is built. Lightly-optioned cars also detract from resale values after the car comes off-lease or is traded in.
With the advent of 5G and web-connected cars, manufacturers are looking at building only one trim level per car that will include every available feature, and allowing the owner to activate each feature on a subscription basis, with the ability to turn features on and off at various times. For example, heated seats may cost $4.00 per month on a subscription basis, but the consumer will have the option to disable that feature during the summer months, or not utilize it at all. This enables the car buyer to start with the lowest possible loan or lease payment based on a vehicle with no options, then enable options on a subscription basis as they like. Every used vehicle then is fully optioned, allowing each subsequent owner to enable the set of features they like.
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group