Ecosystems

P97, Shell And GM Try To Reinvent The Gas Run

The latest attempt to reinvent the gas run launched on Thursday (Aug. 16), an effort involving Shell, General Motors and mobile payments provider P97 that enables consumers to find and pay for fuel via embedded in-dash technology inside their vehicles.

The in-dash fuel payment offering debuts as fresh data paints a sometimes confusing picture of the consumers’ willingness to use mobile technology to buy gas, and as companies scramble to further define — and grab a piece of — the emerging market for connected cars.

Here’s what’s happening: The technology enables certain drivers of eligible Chevrolet, Buick, GMC and Cadillac vehicles to find their preferred gas stations and initiate in-vehicle payments for fuel purchases made at some 11,000 Shell-branded fuel stations in North America.

The navigation and payment features are available via the GM Marketplace platform, which has been downloaded some three million times since its launch last year, P97 CEO Don Frieden told PYMNTS. (The Marketplace platform also lets consumers order food and coffee, and make dinner reservations with participating firms, among other tasks.) Frieden said that 2.5 million Marketplace downloads take place on an annualized basis.

As for the fuel payments feature, “it’s like setting up an Uber account for the first time,” he said. “You just have to set it up once.”

According to Frieden, a typical use case of this fuel payments technology would start when the driver notices a low fuel warning light. Using GM Marketplace, the driver can select and store up to three fuel service providers; assuming one of them is Shell, the platform would show a Shell location in the direction of travel. The platform can also display offers and discounts.

When the driver arrives at the Shell gas station, the fuel payments systems determines what pump the driver has selected and pre-authorizes payments — a driver can store up to three different payment methods, Frieden said. “If the driver selects pump No. 4, for example, within seven seconds that pump will be ready to go” because of the payment preauthorization. The technology then sends a three-digit code to the driver, which he or she enters at the pump’s keypad — potentially the first time the driver has had to leave the vehicle.

The driver then selects the fuel grade, pumps the gas and receives an emailed receipt via phone, email or the Marketplace platform. In all, the total process takes about a third of the time as traditional fuel purchases, Frieden said.

According to “Paying At The Pump Report: What Drives Mobile Adoption” from PYMNTS in collaboration with GasBuddy, a survey of 10,000 consumers showed that only 5.9 percent of respondents consider having the ability to pay for gas via mobile app to be “very” or “extremely” important. Part of the reason is worry about the security of using mobile apps for gas purchases.

But the situation changes when talking about younger consumers.

The survey found that 43 percent of high-income millennials said they would be more likely to visit a gas station if its app offered convenience, loyalty and savings. And those younger consumers do indeed visit gas stations. The PYMNTS study found that 65 percent of high-income millennials — consumers born between 1978 and 1995, and with annual incomes ranging from $75,000 to $150,000 — made at least one gas purchase per week. That compares to 58 percent of other respondents who said the same.

Discounts, in fact, are part of the launch of the P97 fuel payments product with Shell. Those eligible GM drivers can earn discounts of 25 cents per gallon (up to 20 gallons) via Shell’s Fuel Rewards loyalty program, among other incentives, according to the gas station operator.

Incentives are key to persuading consumers to switch to these types of digital payments for gas purchases, Frieden said, telling PYMNTS that some buyers “will change payment methods based on as little as five cents a gallon.” Convenience will also work to promote these payments. Not only is there a shorter transaction time, but consumers using this technology don’t have to pull out their payment cards — that may seem like a tiny benefit, but sometimes, at the end of a long day and long commute, it’s often the little things that cause frustration.

Frieden said the in-dash fuel payment tool fits in the emerging ecosystem of connected cars, enabling drivers to engage in more commerce from their vehicles during commutes and other trips. He described a scenario where these in-dash payments go well beyond cash, enabling drivers to order and pay for goods from the convenience store near the pumps without leaving their vehicles.

“You might have your kids in the car, and you need a gallon of milk,” he said. After the driver orders and pays, a “runner” comes out and delivers the products. That would require gas stations to hire staff, Frieden said, but early models of offering such a service are showing “that does not take too many curbside deliveries to justify that service.”

Mobile fuel payments and connected cars are slowly coming together. One of the early steps, though, is figuring out if consumers really will change their habits when it comes to buying gas.

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