PayPal’s PR people must be tired. The debut of PayPal Here, its new blue triangle dongle, was just two weeks ago; then the team turned around and introduced David Marcus as PayPal’s new president just days later.
On Friday, PayPal’s resources in the Northeastern U.S. team were deployed to announce yet another partnership: working with Cumberland Farms, PayPal is providing the payment power behind SmartPay, an app that lets consumers pay for gas at select Cumberland Farms fueling stations with their smartphones.
The consumer-facing sales pitch on SmartPay is easy to understand: sign up for a PayPal account to go with our new app, and we will pay you 5 cents for every gallon of gas you buy. Who doesn’t like cheaper gas? And for Cumberland Farms, the app gives it an uncontestable claim to the title of “Most Teched Out Payment Experience at Any Gas Station.”
As for PayPal, the partnership represents an opportunity to acquire new accounts for a pretty negligible cost. To that end, Cumberland Farms CIO Dave Banks confirmed to TechCrunch on Friday that PayPal is footing the bill for the 5-cents-off discount. But it’ll take a lot of gas buying at 50 stations for the expense to be of any significance to eBay.
Additionally, the 50-gas-station roll out provides PayPal with some on-the-job training for a new kind of technology: the U.S. Global Positioning System. SmartPay matches consumer to station and pump using GPS — and does so on an entirely separate smartphone app, giving PayPal some leeway in terms of working out the bugs. Indeed, PayPal Head of Strategy & Business Operations Patrick Gauthier confirmed over Twitter that, “To test and learn, you sometimes have to separate the experience.” But consumers have already shown merchants that downloading another app isn’t a big deal; the Starbucks app only works at one place, but thousands of customers use it.
With SmartPay, the wild card is whether GPS – which is totally out of PayPal’s control – can quickly and reliably locate the customer. Another app that relies on GPS, Uber, works almost like a charm in Boston, but can frequently cause customers frustration in larger markets like New York. Will that scaling challenge stymie Cumberland Farms as well? The company has said it hopes to enable each of its 600 gas stations throughout the U.S. with SmartPay compatibility.
All in all, this is an interesting experiment in the impact of GPS reliability on the consumer experience. If it becomes the Uber-like experience in NYC, Cumberland will have grumpy drivers and station owners. If it works like the Uber experience in Boston, we’ll have an interesting new way to pay on our hands.
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