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Sirius XM and Visa to Offer In-Vehicle Payment Solution

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Sirius XM (SIRI - Free Report) and Visa (V - Free Report) announced their plan to introduce an in-vehicle payment solution at the recent Consumer Telematics Show in Las Vegas.

The companies noted that this service, once deployed on the dashboard, will allow car users to easily make and manage purchases such as paying for coffee, parking and movie tickets among others. Notably, users can “activate and authenticate” payments with their Visa accounts by using biometric authentication like touchscreen commands and voice.

Additionally, the in-vehicle payment solution will allow safe and secure transactions with the help of technologies such as Visa Token Service. Sirius XM noted that the service will be presented to automobile manufacturers during 2019.

Partnerships With OEMs to Boost Services Reach

Sirius XM, which has strong relationships with automobile OEMs, is looking to provide real- time vehicle services to its users.

Earlier, the company introduced an aftermarket solution to enable smart services at a few dealership locations. Notably, the dealers will offer car buyers three years of free crash alert as well as free premium services like roadside assistance for six months.

With Sirius XM-enabled radio vehicles increasing on the road, we believe the adoption of its other connected services may also increase owing to agreements with OEMs. Notably, over 113 million vehicles on road were equipped with Sirius XM-enabled radios, up 13% year over year in third-quarter 2018.

Additionally, Sirius XM’s penetration into the connected vehicle services business with OEMs like Nissan, Fiat Chrysler and Toyota has been increasing. Moreover, the company extended agreements with OEMs like Audi, Mazda, Land Rover, Mercedes-Benz, Jaguar and Volvo in third-quarter 2018.

Sirius XM Holdings Inc. Revenue (TTM)

Sirius XM Holdings Inc. Revenue (TTM) | Sirius XM Holdings Inc. Quote

Strong Content Lineup Aids Subscriber Growth

Sirius XM's focus on strengthening its content portfolio is aiding subscriber growth. The company added content from talk shows and sports apart from music to boost user engagement.

Additionally, Sirius XM’s partnership with Amazon (AMZN - Free Report) to provide free access to a few of its subscription packages for existing Echo holders is expected to further boost its subscriber base and engagement levels.

Moreover, post Pandora acquisition, the company’s 36 million subscribers across North America and Pandora’s 71.4 million monthly active users (MAUs) together will create the world’s largest audio entertainment company. Notably, Sirius XM added 298K net new self-pay subscribers in the third quarter to end with approximately 28.5 million self-pay subscribers.

However, intense competition in the streaming space from the likes of Apple (AAPL - Free Report) and Spotify is expected to hurt its top line in the near term.

Sirius XM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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