Mobile Payments from the Pump – Without the Hassle

Trevor Mast
Senior Vice President Financial Services Products
Posted on November 3, 2016

Mobile Payments from the Gas Pump

Instant and seamless app-based payments, driven by loyalty

What are you doing to put yourself ahead of the mobile payments curve?  In an industry where payment convenience is paramount for customer gratification, fuel retailers need to maximize simplicity in order to keep their customers satisfied. What if, instead of digging into a wallet and inserting a card into your POS, your customers could use that smartphone they probably already have in reach to make a simpler, faster and safer payment?

With the advent of mobile payments came the predictions of a totally virtual payment landscape. These prophecies may have been somewhat premature, but we may have finally reached a turning point. Retail businesses once shielded from the online shopping shift are changing their tune, and the fuel industry should take note as mobile payments could benefit everyone.

Here’s how the main evolutionary drivers in payments can impact pump operations, reinforce customer relations and streamline the customer experience.

The Loyalty Drive

We have grown accustomed to all aspects of life becoming incrementally more convenient. In fact, customer expectations of convenience mean that an easy and seamless payment experience at the pump really is just an expectation. Time saving is undoubtedly important, but the bottom line is most important.

That’s why a well-constructed loyalty program that delivers real-world benefits can mean so much to customers. Want them to come back? Price reductions will beat saving 30 seconds at the pump every time.

That’s why the industry has seen a significant shift toward tightly integrated loyalty programs, but the convenience and loyalty benefits do not need to end with the fuel purchase. Many gas retailers are consolidating the whole experience to include purchases at the station convenience store. This combats customer attrition and adds real incentives to bring customers back.

Pay Mobile in Real Time

All retail sectors are seeing a steady shift toward customers paying online and through mobile applications. The fuel sector may be a little behind other markets, but as customers increasingly adopt mobile payments, they expect the same experience when they buy their weekly gas.

As the culture of instant gratification becomes increasingly widespread, the ability to quickly and conveniently make a very simple, real-time purchase becomes nonnegotiable. Leading mobile device payment ecosystems such as Apple Pay™, Google Pay™ and Samsung Pay™ are increasingly popular. However, their reliance on merchants and retailers upgrading the POS terminal means that the services are not yet universally available, which has slowed consumer uptake. Retailer-branded smartphone apps linked to customers’ credit or debit accounts, on the other hand, are seeing strong growth as they bypass the need for specific consumer devices and new beacon or NFC hardware at the POS. The benefit of these apps is that everything is done directly from the app – no cards or PINs needed.

When Seamless Payments Aren’t Enough

An increasingly common concept is the notion of invisible payments. In these scenarios, the payment process is something that happens in the background with little or no consumer intervention. The payment process is embedded into the retailer’s smartphone app, so there is no PIN to enter and no need to press the “buy” button. The transaction simply debits the account that has been linked to the app. Such applications are growing in popularity among company car fleets and freight operators as a way to manage fuel purchasing across large numbers of employees and contractors.

But this is just the beginning. With the advent of connected vehicles, the car itself controls the transaction with little or no consumer input. Multiple convergent technologies now make complicated consumer interfaces obsolete. Simply drive up to a pump, fill up, then drive away; the car recognizes the pump number through GPS or Bluetooth, it preselects fuel type, applies any loyalty program price reductions and completes the transaction with no consumer action. Even dropping into the station’s convenience store for provisions can be paid for through the vehicle.

Platform Agnostic

The reality of mobile payments is that there is no single homogeneous solution; in all likelihood, retailers will need to offer multiple options to cover all the bases. The slow but steady growth in device-specific payment ecosystems, such as Apple Pay and Google Pay, which demand a specific consumer device and new merchant hardware, are increasingly being overshadowed by software-led payments through a smartphone app that works across all platforms with no need to invest in a new POS.

Payment & Loyalty Combination

While the transactional element of a fuel purchase can be greatly streamlined through the utilization of mobile payments, that alone will not change the game for gas retailers. Only by combining the payment with a sophisticated loyalty program strategy can merchants convince customers to return.

Now that the EMV migration is nearing, retailers are looking for the next wave. An app-based payment mechanism with built-in loyalty capability keeps the retailer in control of their destiny and drastically reduces the POS costs associated with traditional card processing through EMV.

Mobile payments give retailers an opportunity to proactively influence customer behavior, develop engagement points based on data trends and affect a customer’s selection in order to optimize margins.

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Trevor Mast
Senior Vice President Financial Services Products

Trevor’s expertise in product management, sales and client service; as well as team leadership; sets him apart from his peers and allows him to provide executive-level guidance to his teams and with his colleagues. At FIS, Trevor provides executive oversight of the credit, debit, ATM, software, and fraud prevention product portfolio.