The Gas Station Goes Mobile

A new partnership between MasterCard and P97 Networks is bringing mobile payments to the gas pump using a cloud-based solution that requires no hardware upgrades. Donald Frieden, President and CEO at P97 Networks, and Kurt Weiss, Senior Vice President/Group Head – Mobile Transaction Services – Emerging Payments at MasterCard, share with PYMNTS what motivated the dual effort, how the technology works…and what it means for the retail fuel vertical moving forward.

MasterCard has just announced a partnership with P97 Networks that will bring mobile payments to the gas pump.


Just prior to the release of this news, PYMNTS caught up with Donald Frieden, President and CEO at P97 Networks, and Kurt Weiss, Senior Vice President/Group Head of Mobile Transaction Services and Emerging Payments at MasterCard, who shared their expectations for consumer adoption, as well as their plans to help drive it.

In discussing MasterCard’s motivation behind the partnership, Weiss keyed in on global potential as a driving factor.

“With security, scalability and global capabilities as the top priority for MasterCard’s Fuel Solution,” he tells PYMNTS, “we were impressed with P97’s mobile cloud-based payment platform capabilities and industry standards-based integrations to retail fueling site systems.”

“Through our partnership with P97,” Weiss continues, “the majority of our retail fuel merchants can remotely update their site systems to enable a new digital experience without the need for complex and expensive hardware upgrades, thus providing our partners with the scalability and security they expect from our global network.”

While consumers may not be thinking about mobile payments at the gas station, Frieden points out that the adoption of new technology “typically occurs at the nexus of convenience and repetition.”

The ability for a consumer to pay for fuel from the comfort of their car is going to provide “a better user experience,” he says. “It’s going to be faster; it’s going to be more secure — especially considering cold winter or hot summer days, when the consumer can actually start the transaction without leaving the comfort of their vehicle.”

Citing that most consumers purchase fuel at least once a week, Frieden attests that “a better mobile experience” will make paying for fuel with their smartphones habit-forming for consumers.

“We’re very excited about the partnership and the fuel vertical itself,” adds Weiss, “given that there are over 150,000 stations in the U.S., making it one of the most predominant merchant verticals in the country.”

Taking into account the fact that 70 percent of the consumers who pump gas today do not enter the station’s convenience store, Frieden explains that’s a problem that the MasterCard Fuel Solution will address.

“When we integrate mobile payments with our 360-degree marketing platform,” he tells PYMNTS, “the MasterCard Fuel Solution will enable convenience store operators to directly engage with their customers by delivering personalized digital offers and rewards for the purchase of fresh foods, drinks and other consumer packaged goods. By combining the mobile payment app with these new marketing programs, retail merchants will be able to convert more in-store sales opportunities.”

Frieden adds that the companies are looking at other ways to motivate the consumers to download and use the app so they can get the benefits of it.

“The fastest way to do that,” he believes, “is to provide financial incentives” — which can be everything from discounts per gallon of gas (which would be offered by the fuel brands) when consumers pay with their smartphone to the aforementioned digital offers.

In order to provide the data that is necessary to receive those personalized offers, customers are required to opt in for offers when they download the mobile app, after which they set up their loyalty accounts.

“Historically, in retail fueling,” says Frieden, “consumers have had to swipe their loyalty card first, followed by their payment method. With the advent of mobile payments in the retail fueling and convenience space, consumers will simply load those credentials into their mobile wallet; from then on, they get the benefits in a much more convenient purchase experience.”

By eliminating the friction of the consumer having to enter two pieces of plastic at the pump in order to pay and receive rewards, Weiss notes that the MasterCard Fuel Solution makes that process “much easier, and the consumer will receive instant gratification, as well as being made aware as to items of interest that may be on sale right inside the convenience store.”

There’s also benefits on the merchant side, he adds, as fuel retailers will be able to “offer a superior customer experience, as well as driving higher-margin purchases in the store.”

The MasterCard solution relies not on NFC but multifactor authentication and geolocation services to match the consumer to the point of purchase. Weiss and Frieden are in agreement that employing those technologies in the solution enables “a very large marketplace with very secure mobile payment transactions.”

Additionally, the solution will provide CRM (customer relationship management) capabilities for gas stations and their on-site convenience stores — all of which will be monitored, from the cloud to the site systems.

With retail fuel “being the number one merchant vertical,” concludes Weiss, “it’s absolutely ripe for innovation, through the partnership of MasterCard and P97, to really drive a sea change in what is a daily occurrence for most folks.”