(December 18, 2008) It started not even a week ago, but a pilot program in which Boston-area commuters can pay for parking by mobile phone appears to be a hit with riders, according to early anecdotal feedback.

“The buzz has been huge with customers, we’ve only been deployed for four days,” Ian Larrabee, director of parking services for the Massachusetts Bay Transportation Authority, tells Digital Transactions News today. “It addresses two of our major customer concerns—they wanted proof of payment, and they wanted the credit card option.”

The six-month pilot run by Vancouver, B.C.-based Verrus Mobile Technologies Inc. covers 6,000 parking spaces along the MBTA’s Kingston rail line connecting Boston with suburbs to the southeast, and three lots for ferry lines into Logan International Airport. The authority chose the Kingston line because it is one of only two among the system’s 13 commuter-rail lines where the MBTA owns all the lots, eliminating the need to deal with municipalities that own many other commuter lots.

Customers enrolling for the service first register a mobile-phone number and a Visa or MasterCard card at Verrus’s paybyphone.com Web site or by calling a toll-free number. American Express will be added as a payment option soon, the MBTA says. When parking at one of seven Kingston line stations or the ferry lots, the user calls the toll-free line, enters the station location number displayed on signs throughout the lot, enters the parking space number, and then presses 1. Users can obtain receipts and other transaction information from the paybyphone site. And at one of the ferry lots that permits multi-day parking, users can get a text-message alerts warning them of when their time will expire. Parking-lot enforcement agents get the space number and time the commuter made payment transmitted to the handheld devices they use.

Besides reducing the MBTA’s cash-handling expenses at parking-lot honor boxes, the mobile test enables rushed commuters to leave cash at home and even pay while they’re riding the train, Larrabee says. The MBTA recently raised daily parking fees to $4 for Kingston train lots and $3 for ferry lots from $2 and $1, respectively. Based on customer feedback, Larrabee estimates about 65% of customers said they could live with that, but an electronic-payment option would make the higher rates more palatable.

The MBTA negotiated a fee with Verrus for the pilot and pays a discount fee to its processor for the program, Fifth Third Processing Solutions, the merchant-acquiring subsidiary of Cincinnati-based Fifth Third Bancorp. Larrabee did not have acceptance costs available. The test can be renewed for another six months, and if it is successful, the MBTA will put out for bid a mobile-payments program for its entire system, says Larrabee.

The MBTA’s goal is to get 20% of the spaces using the mobile-payment system. The transaction potential from the pilot is sizable. Commuters parked about 700,000 cars in the test-site lots last year and usage is heading toward 800,000 this year, according to Larrabee.

Payment data are encrypted during the transaction process, and the MBTA itself does not handle card information, Larrabee says. That information is handled by Verrus, which he says is compliant with the Payment Card Industry data-security standard, or PCI. An executive at Verrus, which does business in the U.S., Canada, and Australia, could not be reached for comment. One of Verrus’s customers is the Metra commuter-rail system in Chicago and suburbs, where users of about 30 lots can pay by phone.

In other news involving electronic payments for parking, Parcxmart Technologies Inc. says it will make its Parcxmart Card available in West Hartford, Conn., in 2009’s first quarter. Parcxmart issues reloadable debit cards that can be used for municipal parking and for purchases with local merchants.