Mobile Commerce

Mobile Fuel Payments Rev Up


P97 has been busy.

Seemingly at a pace of “one right after another,” as MPD CEO Karen Webster observed in her recent conversation with P97 President and CEO Don Frieden, the technology company entered into a relationship with MasterCard to innovate mobile payments at gas stations and convenience stores, then into one with SAP to enable car-based payments at those locations, and — most recently — with Chase, for mobile payments at gas stations and convenience stores using the Chase Pay app that will launch in 2016.

Not a small amount of offerings to put together in a month’s time … and Frieden points out that the common thread among all of them is the reduction of friction across payments.

“It’s the ability for mobile payments to now transform the whole consumer experience,” he tells Webster. “Anything from the loyalty aspects to a frictionless payment almost to the point that the payment becomes invisible.”

Indeed, as Webster remarks, everyone likes to think that’s how all payments will be handled in the future. From a practical standpoint, however, there are use cases where mobile payments are more valuable than it may be in others. Frieden states that mobile payments in fueling is important in “several different aspects.”

The first is that almost everybody purchases fuel for their automobile every single week — to the tune of 40 million transactions per day in the U.S. alone. It’s around 15 percent of discretionary household spend, compelling Frieden to call it “a huge, very meaningful market.”

The second aspect is that fueling is, in the P97 CEO’s words, “an emotional purchase.”

“There’s no other industry that actually posts the price for their product at the corner,” Frieden points out. “Therefore, as little as 4 cents per gallon can influence the consumer’s buying decision — either for payment type and/or location that they visit.”

The third aspect that highlights the importance of mobile payments in fueling, according to Frieden, is that there exists “more fraud at outdoor payment terminals than anywhere else in the payment chain.”

He says that mobile commerce, by using multi-factor authentication and leveraging token services in the cloud, leads to the near total elimination of fraud — “certainly within the mobile payments space.” As mobile leads to the removal of payments from outdoor payment terminals across the U.S., the technology will reduce fraud “all the way across the industry.”

For all the security benefits that mobile does offer, Frieden does not believe that it will totally eliminate the need for EMV at outdoor payment terminals. What it does do, he shares with Webster, is “give marketers a really interesting option” to potentially incorporate, similar to the old days of full-service and self-service lanes at gas stations, a “mobile payment” lane.

Doing so, given the cost of upgrading to EMV-capable fuel dispensers — which Frieden notes can cost around $4,000 per unit, or $30,000 to $40,000 per location — would free up money for marketers to offer additional discounts to customers that use a mobile lane.

Potential cost savings and the technological security elements aren’t the only benefits mobile payments at the gas station offer to customers, Frieden adds. They also secure the customers themselves, minimizing their time outside of the vehicle in inclement weather and eliminating the concern about what payment methods to leave inside the car (as well as their wallet or purse) and what to take with them.

Using the SAP method, a consumer can — from inside their car — select “buy gas”; geolocation services identifies the location; and the pump is armed within 3 seconds.

“Literally as fast as the consumer can get out of the car, select the fuel grade and insert the nozzle — they’re going to be pumping fuel,” iterates Frieden. “It’s about a 40 to 50 percent faster experience.”

And the mobile payments technology that P97 has created also saves the consumer time on purchases made inside the convenience stores at fuel locations.

Putting these offerings together has required “quite a few integrations” on P97’s part, Frieden tells Webster.

First and foremost, the company had to integrate into the point of sale and fueling site systems; that’s “site level” integration. “Even if they had a car wash,” remarks Frieden, “we had to integrate into those systems.”

The second area that P97 had to integrate with was the payment networks, allowing it to provide a number of different mobile payment options for consumers. Frieden shares that the company is currently working with MasterCard on an integration into a network-based token service, “so the transaction can be authorized at the site level, run the existing rails, and be authorized by the payment network.” P97 has also built out the capabilities of above-site authorizations, which include above-site token service.

Thirdly, P97 had to integrate into the loyalty hosts for individual offers.

“The mobile platform needs to support all of the existing programs that are offered by either the oil company brand or the merchant, because we don’t want to take any capabilities away from consumers,” explains Frieden.

The company leveraged industry standards-based interfaces to connect to loyalty hosts that are most predominant in the industry, and can also leverage settlement for related offers over the existing rails between oil companies and their merchants.

The aforementioned connected car initiative, of course, required its own set of components and integrations.

“As we integrate to SAP for the connected car,” adds Frieden, “we can facilitate the payment from the cloud, we can facilitate the connectivity to the site, and then SAP connects the consumers with the merchants as part of their broader marketplace offering.”

The mobile fuel purchase capabilities that P97 enables are already in the market, Frieden tells Webster, with sites running in Salt Lake City, the Boston metropolitan area, as well as areas of Texas and Idaho.

“By Q1 — just a few months away,” teases Frieden at the end of his conversation with Webster, “we’ll be providing some announcements about some much larger, major metropolitan launches for mobile payments.”

Start your engines.


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With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.