CSA Exclusive: PayByCar drives 'on the go' retail in new direction
PayByCar turns a customer’s vehicle into part of the fuel payment process.
Chain Store Age recently had a conversation with Kevin Condon, founder and CEO of PayByCar. The Boston-based company is attempting to revolutionize the process of purchasing fuel with a little help from drivers’ E-ZPass toll transponders.
The PayByCar solution enables consumers to purchase gas from their car without handling cash, a credit or debit card, or a mobile app. Drivers who are signed up with the E-ZPass electronic toll collection system can register online for PayByCar and make digital fuel purchases at participating gas stations via their E-ZPass transponder.
Purchases through PayByCar do not go a consumer’s toll account, but are charged directly to a payment method they choose when enrolling, such as credit or debit card or e-wallet. Upon entering the station, PayByCar recognizes a customer’s transponder and sends a text to their smartphone.
Condon explained the philosophy and technology behind the PayByCar in-vehicle fuel payment model.
What inspired you to pursue in-car payment technology?
“In-vehicle commerce is already a $600 billion per year market, and gas is a major component. There are 135 million commuters; it’s a very big market. However, the process of conducting in-vehicle commerce is full of friction. There are a lot of proprietary loyalty apps looking to make in-vehicle commerce simpler, but the sheer number of apps puts consumers off.
“In the longer term, higher-end vehicles with embedded payment capabilities are coming online, but only for select models, and fleet turnover is slow. The average age of a car on the road is 12 years. The vast majority of drivers need a payment solution for the car they own today. It’s an area crying out for a solution.”
What was your biggest challenge in developing PayByCar?
“In-vehicle payment is the classic chicken-egg scenario. How do you get consumers to sign on to in-vehicle payment before retailers are offering it, and how do you get retailers to offer in-vehicle payment before consumers have adopted it? Consumers are already overwhelmed with payment apps and e-wallets. To break through the noise, you need to leverage existing consumer behavior.
“On the retailer side, we had to decide which vertical to start with. Petro is the most complicated use case, because a lot of things are involved. Consumers have to activate the pump, select a grade of gas, fill the tank, replace the nozzle, etc. But we can eliminate eight of the 12 steps consumers normally take at the gas pump, and shave 80 seconds off a typical four-minute transaction. If we could make it work in the most complicated use case, we could apply it to other use cases that would be easier.”
How did you select E-ZPass, and were they immediately receptive?
“After deciding to leverage existing consumer behavior to enable in-vehicle commerce, we determined toll transponders would be the way to go. It provides a way of instantly identifying a vehicle and it makes sense to consumers. There are 65 million toll transponders in the US, and E-ZPass represents the largest portion – over 35 million transponders in 17 states.
“They have a big footprint and up to a 90% penetration rate in urban areas, which made them attractive to approach. E-ZPass, which is a consortium of 24 members across 17 states and seven tolling agencies, was immediately receptive. They get no financial reward, but it makes the transponders more useful, so more people might get one.”
How receptive have retailers and consumers been?
“We are working with Global Partners LP, who have a consumer footprint of over 1,500 convenience store/gas stations across New England. They have been very helpful in getting things up and running. We were always confident retailers would get and like what we’re doing, but we would need to prove the concept. We are getting inquiries from more retailers as quickly as we can manage.
“It takes longer for the consumer. It’s a larger universe with potentially millions of people, but the initial response is very encouraging. Twenty percent of people who have enrolled in PayByCar have used it at a gas station, but you don’t buy gas daily. It’s a purchase you make weekly or even less. It will take a few weeks for the balance to make a purchase at a gas station.”
Do you see expansion into verticals beyond convenience/fuel?
“Before launch began, we reached out to other verticals, like quick service restaurant (QSR) drive-thru and big-box retailers doing high-volume fuel and curbside pickup business.
“Longer term, I think we could do well in curbside grocery pickup. The ‘last mile,’ or even last few yards, of curbside grocery are filled with friction for both the consumer and retailer. We could let a retailer recognize a customer enrolled in a curbside grocery program as soon as their vehicle enters the property, so the multifactor authentication process begins before they park. We are also speaking with an auto repair chain about potentially cutting 35% of the time off their express oil changes.”
Chain Store Age recently had a conversation with Kevin Condon, founder and CEO of PayByCar. The Boston-based company is attempting to revolutionize the process of purchasing fuel with a little help from drivers’ E-ZPass toll transponders.
The PayByCar solution enables consumers to purchase gas from their car without handling cash, a credit or debit card, or a mobile app. Drivers who are signed up with the E-ZPass electronic toll collection system can register online for PayByCar and make digital fuel purchases at participating gas stations via their E-ZPass transponder.
Purchases through PayByCar do not go a consumer’s toll account, but are charged directly to a payment method they choose when enrolling, such as credit or debit card or e-wallet. Upon entering the station, PayByCar recognizes a customer’s transponder and sends a text to their smartphone.
Condon explained the philosophy and technology behind the PayByCar in-vehicle fuel payment model.
What inspired you to pursue in-car payment technology?
“In-vehicle commerce is already a $600 billion per year market, and gas is a major component. There are 135 million commuters; it’s a very big market. However, the process of conducting in-vehicle commerce is full of friction. There are a lot of proprietary loyalty apps looking to make in-vehicle commerce simpler, but the sheer number of apps puts consumers off.
“In the longer term, higher-end vehicles with embedded payment capabilities are coming online, but only for select models, and fleet turnover is slow. The average age of a car on the road is 12 years. The vast majority of drivers need a payment solution for the car they own today. It’s an area crying out for a solution.”
What was your biggest challenge in developing PayByCar?
“In-vehicle payment is the classic chicken-egg scenario. How do you get consumers to sign on to in-vehicle payment before retailers are offering it, and how do you get retailers to offer in-vehicle payment before consumers have adopted it? Consumers are already overwhelmed with payment apps and e-wallets. To break through the noise, you need to leverage existing consumer behavior.
“On the retailer side, we had to decide which vertical to start with. Petro is the most complicated use case, because a lot of things are involved. Consumers have to activate the pump, select a grade of gas, fill the tank, replace the nozzle, etc. But we can eliminate eight of the 12 steps consumers normally take at the gas pump, and shave 80 seconds off a typical four-minute transaction. If we could make it work in the most complicated use case, we could apply it to other use cases that would be easier.”
How did you select E-ZPass, and were they immediately receptive?
“After deciding to leverage existing consumer behavior to enable in-vehicle commerce, we determined toll transponders would be the way to go. It provides a way of instantly identifying a vehicle and it makes sense to consumers. There are 65 million toll transponders in the US, and E-ZPass represents the largest portion – over 35 million transponders in 17 states.
“They have a big footprint and up to a 90% penetration rate in urban areas, which made them attractive to approach. E-ZPass, which is a consortium of 24 members across 17 states and seven tolling agencies, was immediately receptive. They get no financial reward, but it makes the transponders more useful, so more people might get one.”
How receptive have retailers and consumers been?
“We are working with Global Partners LP, who have a consumer footprint of over 1,500 convenience store/gas stations across New England. They have been very helpful in getting things up and running. We were always confident retailers would get and like what we’re doing, but we would need to prove the concept. We are getting inquiries from more retailers as quickly as we can manage.
“It takes longer for the consumer. It’s a larger universe with potentially millions of people, but the initial response is very encouraging. Twenty percent of people who have enrolled in PayByCar have used it at a gas station, but you don’t buy gas daily. It’s a purchase you make weekly or even less. It will take a few weeks for the balance to make a purchase at a gas station.”
Do you see expansion into verticals beyond convenience/fuel?
“Before launch began, we reached out to other verticals, like quick service restaurant (QSR) drive-thru and big-box retailers doing high-volume fuel and curbside pickup business.
“Longer term, I think we could do well in curbside grocery pickup. The ‘last mile,’ or even last few yards, of curbside grocery are filled with friction for both the consumer and retailer. We could let a retailer recognize a customer enrolled in a curbside grocery program as soon as their vehicle enters the property, so the multifactor authentication process begins before they park. We are also speaking with an auto repair chain about potentially cutting 35% of the time off their express oil changes.”