With the exception perhaps of the Starbucks mobile app, mobile apps for payment have been struggling to catch on with consumers. Some petroleum retailers, however, appear to making a go of it with apps that offer discounts on gasoline purchases at the pump.
For the first time in the Southeast, for example, Mapco, which operates 373 gas and convenience stores in the region, is enabling users to receive 5 cents back per gallon by paying exclusively with PayPal via MobilePay, which is the “My Mapco” app’s new payment option. “With average gas prices in 2014 costing $3.49 per gallon and the average American using 533 gallons of gas per year, this gives people a chance to save almost $100 per year on gas–a nice benefit given today’s economy,” a PayPal spokesperson noted in an email to PYMNTS.com.
Mapco’s My Mapco app rolled out just over a year ago, but beta testing with MobilePay commenced in May. MobilePay, developed by Firefly, went out of beta on Aug. 26.
To date, more than 2,300 transactions have been made using the MobilePay function, the PayPal spokesperson said. “We are continuing to see adoption growth among consumers,” she said, unable to share specific numbers.
Once the app is downloaded to either an Apple iOS or Google Android device, it recognizes when the user is at any participating MobilePay location. They can pay via the app without leaving the pump.
Beyond saving customers time, money and collecting rewards that can be used toward gas and other items, the app also can enable customers to pay for add-ons, such as a car wash.
Although Mapco is supporting its mobile-payment app with PayPal, the National Payment Card Association (NPCA) is supporting a similar mobile app that uses the automated clearinghouse (ACH) system as well. Last fall, it began offering its smartphone-based app by tying its mobile-payment service with VeriFone’s Smart Fuel Controller.
The service enables petroleum merchants that support the VeriFone system to use their existing payment-acceptance infrastructure to accept mobile payments.
NPCA specializes in offering decoupled debit cards to access cardholders’ checking accounts using the magnetic ink character recognition information from a personal check supplied when customers register online. Consumers then may tie the merchant-branded debit card to the participating merchant’s own mobile app. Merchants also may apply their brand to a mobile app supplied by the processor.
As PYMNTS.com noted in a recent research report on mobile ACH use, heavy marketing, combined with discount offers and immediate gratification, often can be a good combination to drive change in consumer behavior and get them to use mobile apps for purchases.
Though convenience store and petroleum retailer Cumberland Farms just launched its SmartPay initiative in winter 2013 in conjunction with NPCA, by fall later that year 30 percent of the merchant’s decoupled debit transactions already are initiated from smartphones instead of the company’s cards, driven mostly by customers ages 18 to 45.
To encourage use of its free SmartPay Check-Link service, Cumberland Farms, which operates some 600 locations, provides customers who use the card or mobile app an instant 10-cent discount on every gallon of gas they purchase. Customers see the savings on the screen of their Apple iPhone of Google Android smartphone when fueling, and the price on the pump automatically notes the discounted amount.
Cumberland Farms, like other merchants supporting NPCA’s decoupled debit program, fund their discounts from savings associated with not having to pay card-network interchange. National Payment Card settles its transactions with merchants daily.
Cumberland Farms also provides customers the option to fund their SmartPay account via PayPal, which charges rates much higher than those typically incurred via ACH. When using PayPal, SmartPay customers may tie the PayPal account only to the mobile app, and they do not receive the 10-cent discount on gas purchases.