Gone are the days of rummaging through car ashtrays for quarters to feed the meter. Brad Powers, CTO of Passport, tells PYMNTS that consumers can now pull out their phones and pay from an app. The June edition of the mPOS Tracker™ features more from Powers on how mobile + apps eliminate parking’s third biggest friction. The Tracker also contains updates on more than 210 mPOS players that offer solutions in this space worldwide. Now about finding that parking space and parallel parking …
If you’ve driven for long enough to remember cars without backup cameras, you’ve probably experienced plenty of parking meter anxiety. This scenario might be familiar: You’re in a city, where finding a parking space can be harder than turning left on a green light. Luck strikes, and you find a spot on the street somewhere remotely near your destination. But there’s a problem — you don’t have change and you have to run the risk of getting a ticket, the very thing you’re scrambling to avoid, while you buy a pack of gum in order to get some change to feed the meter.
Previously, you would have had to find a new spot that could accommodate different payment methods, usually at a premium price, but that’s all changing with parking and transit apps. Companies like Passport create custom mobile platforms for cities and other municipalities that enable drivers to pay parking fees, commuters to pay mass transit fares, wayward parkers to pay enforcement fines and more, all from their smartphones.
According to Brad Powers, Passport’s CTO, none of it would be possible without mobile payment technology.
“Our only reason for this business is mobile payments,” he said. “The only reason we got into it is mobile payments.” In fact, he said, without the rise of mobile payment technology, most parking apps would have never gotten off the ground.
PYMNTS caught up with Powers to talk about about how mobile payments have powered the mobile parking industry, how to encourage those unfamiliar with mobile payments to give parking apps a try, and what’s next down the road.
A business powered by municipalities and mobile payments
According to Powers, the success and rise in popularity of parking and other transit apps is closely tied to the wider acceptance of mobile payment technology. As consumers become increasingly accustomed to paying for all sorts of purchases with their phones, they feel more confident that they can use the app to avoid having to make change or risk a ticket.
“In our space, parking and transit, it has a huge impact,” Powers said of mobile payments’ rise in use by the general public. “We do have parking lots out there that are mobile-only. You wouldn’t have seen that years ago, but it’s something that is accepted now.”
Currently, Passport accepts all major card types, including Visa and MasterCard, as well as PayPal. The company also has its own mobile wallet, which Powers said allows users to deposit funds into their accounts and then withdraw from that amount to make payments. This allows the company to save money by avoiding payment processing fees.
But while most apps seem designed to cater to the needs of everyday consumers, the business model and customer base for parking and transit apps is a bit different, according to Powers.
He said that Passport, and other apps like it, aim to serve municipalities like large cities or towns. To do that, the company offers services like parking rate management, payment collection, processing and enforcement, among others, in order to help cities take better control of their parking lots. Municipalities, Powers said, are the company’s primary customer.
“We sell our services to the municipalities to make their lives easier and that, in turn, is kind of a benefit to our second customer, which is the parker or the rider,” he explained of the white-label app.
“White-labelling has been a big thing,” Powers said. “It’s not called the Passport app; it’s called the Boston app, so allowing the businesses to push their own brand has been a big deal in the past three years. People want to own their brand.”
Getting users involved
While municipalities may be the primary customers, Powers said that he and his team are careful to make sure that the app is as easy and convenient to use as possible for everyday users.
While he recognizes some parkers may be unfamiliar with – or even suspect of – paying with their phone, Powers thinks paying for parking can be an entry into mobile payments for the uninitiated. And, he said, “once a user has adopted mobile payments for parking or transit, they never go back.”
“It’s a really convenient way for people to jump into paying for something with their phone. This transaction can take place in any city, any street across the area where you might not have access to $3 and quarters or ‘all I have is a $20 on me,’” Powers said. “I will download the mobile app and pay for it there. So the inability for parking and transit to provide an easier experience for transactions like cash or credit card [steers users toward the app].”
Powers said that when an app is unveiled in a new city, utilization rates see “huge upticks” as customers adjust to using the app to pay for parking, tickets, transit passes or other services.
So far, Powers explained, a particular city’s adoption has been tied to a few different factors, including just how tech-savvy a city’s residents are when the app launches.
“Cities that choose to adopt mobile payment technologies are usually savvy from a technology and business perspective,” Powers said. “They understand the costs associated with alternative methods of payment for parking and transit, and see mobile as the least cost and most flexible payment solution. Cities that skip the meters or terminals where credit cards are accepted on the streets or buses and go right to mobile see considerable savings and a higher adoption rate.”
Similarly, he said, cities in which the service is just recently being rolled out, like Green Bay, Wisconsin, are seeing higher adoption early on. This is mostly likely because users are already familiar with services like Passport after using them in another city, and therefore are more likely to use them in their day-to-day lives.
But, Powers noted, adoption doesn’t always have to be powered by an existing experience or familiarity with technology. Sometimes, it can come from a customer’s simple desire for a more convenient and comfortable experience.
“In locations where paying with mobile is the most convenient [option], we have adoption rates approaching 90 percent in daily commuter lots,” Powers explained. “Utilization starts with utility; In places with extreme weather – hot or cold, rain – people choose to pay for their train fare or parking with mobile to avoid being outside in the elements, or to be able to track your bus or train from the app.”
The apps are also multi-language programs, Powers said, which enables users to work in many different dialects that are preloaded into the app. It also helps users from other cities and countries to park with some preloaded familiarity, wherever they may be.
Passport also encourages users to submit feedback to refine the app. However, Powers said, many times features that customers desire are precluded by different laws and regulations.
“Our customer is the municipality; their customer is the parker,” Powers explained. “Although we try to also provide in help and the user experience for the parker, our main customer, the person who pays us, is the city. We get feedback on a regular basis, but a lot of the things that I would love to do are things the city wouldn’t allow or it’s against the law.”
Keeping it all secure
Powers noted that one thing that is clearly important to customers, cities and parkers alike, is security. When it comes to parking, Powers said that fraud is fairly low, because people are not typically willing to associate their vehicle and license plate with a fraudulent transaction.
But while fraudulent parkers may not be a big concern, keeping all the payment and personal information from parkers stored inside the app is.
According to Powers, Passport utilizes PCI-DSS Level 1 Certification and SSAE-16 Type 2 Accreditation in order to make sure sensitive data is kept safe from prying eyes. The company is also listed on the MasterCard Service Provider Compliant list and the Visa Global Registry of Service Providers.
Powers said that his team also uses a number of other tools to make sure their security protections are working at the highest level possible.
“Compliance and security are two big things for us,” Powers said. “We go through multiple audits on a regular basis, ethical hackers, constant checking on our system and intrusion detection system so we can make sure everything is running fine.”
Powers said that he expects mobile parking apps to change as mobile payments, the tech that allows them to exist, continues to evolve and change. Specifically, he said that he sees the evolution of microapp payment technology as an important part of the future of mobile payments.
“I like the microapps stuff right now,” Powers said. “That’s pretty interesting to me. I think that facilitating payments through Facebook Messenger or through some of these other messaging-type apps, like WePay, where I’m facilitating through an infrastructure I already have on my phone, is something we’ll start to see more of.”
No matter what the evolution of mobile payments brings, it seems the days of searching your cup holders for quarters to feed meters may soon be permanently expired.
To download the June edition of the PYMNTS.com mPOS Tracker™, click the button below …
About The Tracker
The PYMNTS mPOS Tracker™ is your go-to resource for staying up to date on a month-by-month basis. The tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.