The Power of Mobile Payments At the Gas Pump

Mobile commerce is breathing new life into retail – even at gas pumps and convenience stores. For certain consumers, that means purchasing everyday items like fuel or a soda or a newspaper is about to get a lot quicker and a lot more convenient. In a recent digital discussion, PYMNTS sat down with Bob Wesley, Chief Strategy Officer at Aurus Inc., and Jon Regan, Director of Marketing at Alliance Energy, LLC to find out how they are partnering to create a mobile payments app to boost gas and c-store sales, enhance the consumer experience, and offer security and loyalty programs in ways the industry has never before experienced.

THE ALLTOWN MOBILE PAYMENTS SOLUTION

The Alltown mobile payments solution is being brought to life by gas station and convenience store owner and operator Alliance Energy, LLC and Aurus, Inc., a technology solution provider.

At the start of the conversation, Regan said that the creation of the app stems from their desire to offer Alltown customers a modern, seamless payment platform that is smartphone-based. Though it is still in beta testing, it is the first of its kind in the world to allow any major credit card to be uploaded into a mobile wallet used at the gas pump. That, Regan said, is its unique identifier.

The way it works: A customer pulls into an Alltown location, chooses a specific pump, and activates the payment process with their phone – all while still in their car. They click on the app, login, and the app immediately recognizes which location and pump the customer is at. It then asks the customer to choose a credit card. They can upload any amount with any major credit card to their mobile wallet, including ExxonMobile smart cards and Alltown gift cards.

After the card and amount is selected, it takes about 5-8 seconds before a message pops up for the customer to “begin fueling.” The customer then gets out of car and does so. One of the benefits, of course, of the app’s current New England focus is that in inclement weather, customers have to spend very little time outside of the car.

“We’re also noticing that paying with the app is faster than swiping a credit card by a few seconds, which we’re very happy about,” said Regan. He added that after fueling is done, a screenshot of the receipt is sent in a push notification and emailed, and if the customer chooses to opt-in for SMS, a texted receipt is also sent.

“We make sure the entire process from start to finish is as clear and concise as possible,” said Regan.

The motivation behind the Alltown mobile payments app also stems from a desire to have a loyalty component to offer app-only discounts. “We wanted to create a sense of loyalty with our customers that we didn’t previously have,” he said. The company also took a step back to ask themselves whether or not their customers really wanted a mobile payment option. What they found, after deploying LevelUp in c-stores to test the waters, is that they did in fact want one. The success with LevelUp was really the blueprint to launch the beta app, said Regan, and they knew which direction to pivot toward.

The real challenge, however, is getting the 70 percent of customers that fuel up and do not enter the convenience stores to enter them. Regan indicated that while fueling up, most people are on or near their phones, so by offering them app-only discounts and exclusive in-store deals, they hope to see more traffic in the c-stores.

“That’s really where we’re hoping to see success with the app,” said Regan.

WHAT AURUS BRINGS TO THE TABLE

Once Alliance knows the customer and what how they’re spending, they can begin to deliver targeted one-to-one communications with that customer, said Wesley.

“There are a lot of key variables like where a customer is, what pump you’re at, social media feeds, or what the weather is – for example, if you’re cold sitting inside your car, you might want to be served up a hot coffee offer,” he said.

There’s also some integration with respect to the store experience, Wesley added. There’s media displayed in stores and at pumps, and Aurus has the ability to deliver certain media at the POS.

“We coordinate that media to be relevant based on the customer experience. So, we might do something to teach someone how to do a signature at the in-store checkout, or just thank them for their business,” he said.

Finally, there are different content business rules that relate to what customers have purchased in the past, what they’re purchasing now, and the rewards campaigns that then resonate with them. All of those rules can be brought to life, explained Wesley.

“As an organization, we’re heading more to individualized marketing, and we feel the app is perfect for that. Customizing campaigns for people that are heavy on a certain beverage, or the grab and go sandwiches. Different people want different things,” added Regan. “We’re finding the best ways to communicate and deliver the best content to the consumer.”

From the start, Alltown wanted to adopt new technology to make payment easier for their customers, but not at the expense of throwing out their current store systems, which the made hefty investments in.

“We have the ability to take existing either closed architecture or service-oriented architecture systems and sandbox them in a way that doesn’t require any major changes to these systems. And we can do that in a secure way,” said Wesley.

Wesley explained that the reason why Aurus could step up to the plate and deliver this solution was due to a few things, one being that they’ve had a lot of experience working with POS systems that are not always open to this type of innovation. Second, they needed to connect with the backend of Alltown’s existing payment processor, and provide all the detailed financial information involved with any type of transaction. Aurus already had that expertise and is integrated with all of the major processors in the US, noted Wesley. Finally, Aurus has deep domain expertise in payments and mobility and how to overcome these technologies challenges in this environment.

THE CHALLENGES ALONG THE WAY

“We faced a lot of key challenges in creating this solution, first because there are so many ways to pay these days,” said Regan. Only two solutions in the entire industry offer a way to pay for petroleum via smartphone, and the Alltown app is one of them. While the in-store tender options include all major credit cards, a mobile payments system sparks entirely new categories, he said.

“With a mobile wallet comes a whole new category that we believe will start creating more categories, like watches, wearable media, and more,” said Regan. “Mobile will turn into 4 or 5, or even 10, other platforms. That’s something we’re excited about.”

According to Wesley, the fundamental problem with a piece of plastic is that it’s one-dimensional. While it might have a nice color to it, consumers really don’t remember what it represents.

“What we’re able to do is bring to life a card relationship with the cardholder,” Wesley said. Then, of course, there’s Apple Pay and other new payment products coming out – some of which are payment types, or ways to hold card tokens. Wesley indicated that the plan is to have an open system with the Alltown app that will accommodate all of those.

But there were many other challenges that they encountered from the start, said Regan.

“We had to consider our legacy systems that we had invested in for many years at the store and the payment processor that we didn’t want to change, the manufacturer of all of the payment systems, and the POS and the partnership with the fuel brands, and more,” he said.

“A lot of people have approached mobile in this industry with the idea that the architecture needs to be changed, providing a whole new system to start over again. We’ve worked very hard in a lot of industries to sandbox the existing POS architecture,” said Wesley. He explained that the Aurus system has been built with that flexibility – they realize that retailers have made a substantial investment in their POS systems and won’t change it to adopt a new way to pay or a compliance standard.

In addition, security is a top concern. No card data reaches the store when you pay with your phone – we have a unique one-time token present, explained Wesley.

“To add to that, Aurus was able to integrate with our legacy POS and MPD systems very quickly. Some people said it would take 2 years, some 5 – they did it in about a month,” said Regan.

“Overall, there was a lot going on, and the challenges were numerous,” said Regan. “But the fun part starts now.”

PREDICTING THE FUTURE

Even with disruptors like Google Wallet and Apple Pay in the space, Wesley noted that not much is different – there are forms of payment that exist today that can only be used at a particular retailer, then there are those that can be used across retailers.

“We like that Apple is great at creating user-based experiences, but it’s a big ocean and there’s a lot of opportunity for different ways to pay. That said, we’re going to help Apple Pay, Samsung Wallet, and more to be accepted,” said Wesley.

On Apple Pay and other players’ effect on the industry, Regan responded by saying, “Bring it on.”

“We want that – we want a proprietary mobile payment platform to speak to and learn about customers, and to grow with them. We can add features to our loyalty program, or develop and see better consumer-facing technology inside the stores. And, really, Apple Pay and Google Wallet are just other components of mobile wallets themselves,” he said.

What both Aurus and Alliance Energy are excited about, where they see real opportunity, is in fleet cards. Wesley indicated that they were looking at a number of things that could be exciting to fleet card issuers to help them enhance their brand and collect valuable information that they need.

“In our industry especially, we own several mid-sized truck stops and see a lot of fleet customers in our locations,” added Regan. “That will really be another unique identifier for us and another piece to the Alltown app.”

In the future, Wesley predicted that the industry would see convenience stores morph into lifestyle stores.

“It will be more convenient to pick up something to eat at a c-store on the go – you might be able to order food, fuel up, and then pick that food up all from your app.”