PayByCar Seeks $10 Million to Expand Mobile Payment Services

Mobile payments company PayByCar aims to raise $10 million to expand its services.

The Boston-based company announced its funding plans Monday (Jan. 13), aiming to raise that money in the first quarter of the year.

“After raising $7.5 million to date, our next seed round will fund our expanding contract to scale PayByCar to 340 gas stations in eight states, off-street parking in three states, and our 20-state driver enrollment campaign with E-ZPass,” PayByCar President and Co-founder Anand Raman said in a news release provided to PYMNTS.

Founded in 2019, PayByCar lets drivers employ E-ZPass transponders to pay by text at gas stations and parking meters. The company raised $4 million in a seed funding round in 2022.

After wrapping its next seed round, PayByCar plans to expand its offerings to cover other types of transactions, like paying for car washes, drive-thru restaurants and in-store purchases at convenience stores.

Last year, the release notes, PayByCar expanded its “Driven by E-ZPass” non-toll payment program across the 20 states in the E-ZPass network, letting 59 million consumers with the transponders pay for fuel using those devices.

“For retail fueling and off-street parking, PayByCar users simply pay by responding to a text message when they drive into participating locations,” the release added. “Mobile purchases do not get applied to the customer’s toll account. Instead, the payment is charged to the payment card or wallet the customer uses when enrolling in the Driven by E-ZPass program on the PayByCar website.”

The company’s funding efforts come amid a surge in contactless payments. As covered here last year, the days of customers digging through their pockets for cash or cards are fading.

“Innovations like tap on mobile and mobile wallets go a long way to simplify and ease the payment experience for the customer,” Julie Malikayil, senior manager, payments products at Discover Global Network, told PYMNTS.

She noted that these payment innovations give merchants, particularly small and medium-sized businesses (SMBs), flexibility, cost-effectiveness and improved customer experiences.

Traditional point of sale (POS) systems have been a longstanding part of accepting payments at brick-and-mortar stores, though they bring with them limitations.

“A traditional POS is stationary and takes up a lot of space,” said Malikayil, restricting how and where payments can be made.

By contrast, tap on mobile payment solutions free merchants from a needing a single checkout spot, useful for smaller companies that may not have the budget for costly tech investments.

“Food trucks, mom-and-pop shops and individual vendors can simply download an app and start accepting payments,” Malikayil said. “The barrier to entry is super low.”