Mobile-Payments Provider for Parking Looks to Serve Offers for Nearby Businesses to Users

PayByPhone Technologies Inc., which runs mobile-payment programs for parking in half a dozen U.S. cities, is looking for ways to serve relevant offers to users of its system, a top executive with the company said Thursday.

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The offers, for example, could include discounts at stores or restaurants near where users have just parked, Barrie Arnold, chief commercial officer for the New York City-based company, said at a mobile-payments conference in Orlando, Fla.

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The new program, which Arnold characterized as being in “beta” development, would involve deals PayByPhone cuts with relevant businesses near parking lots and city meters and would be tied to data the company has regarding the location of the user’s car and the length of time the user paid for. “We’re looking at ways to add value to the [parking] transaction,” Arnold said. “We know how long you parked and where. Can we present you with an offer?”

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Another new application the company is working on is one that would allow the PayByPhone wallet to be used on functions or services related to parking, such as trains, taxis, and bike-rental places, Arnold said. “We’re trying to build an app that can be used throughout the day,” he said.

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PayByPhone works with 1,000 parking clients and has 7.5 million registered users, a number that is growing by 100,000 users a month, Arnold told the audience. Cumulatively, the company has handled 120 million mobile parking payments. The total U.S. parking market generates 4.5 billion transactions annually worth $22 billion, Arnold said. PayByPhone and its competitors could ultimately claim three-quarters of that volume for mobile payments, he said.

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In one of its longer-term projects, PayByPhone is operating a near-field communication (NFC) system for San Francisco Municipal Transportation Agency in which it has affixed contactless stickers to some 31,000 city meters. The system went into operation 18 months ago. “At the time [it started], it was the largest NFC installation in the world,” Arnold noted.

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The stickers allow users to link to the system by waving a mobile phone enabled for NFC near the meter. The results so far indicate the SFMTA is collecting average of revenue of $3.87 per transaction from PayByPhone users, compared to 89 cents from coin users. One-fifth of all parking revenue now comes from PayByPhone transactions.

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The rise in mobile usage comes despite a 45-cent convenience fee the city levies to cover credit card interchange, Arnold said. “It’s a quick and easy way to pay for parking,” he said, adding that “the 45-cent fee disincentivizes the consumer.”

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To use PayByPhone, drivers register with the system by entering information about themselves, the card they are using, and their vehicle’s license-plate number. Once registered, they can pay for parking by calling up the wallet, entering the location number assigned to the meter, and the amount of time they want and clicking a “pay” button.

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Users receive reminder texts as the expiration of time approaches, allowing them to top up time on the meter remotely. “Consumers absolutely love that,” Arnold said. They also receive email receipts. While the meters do not register time paid for, PayByPhone user data, including the meter location number and associated license-plate number, are fed to handhelds used by enforcement officers to check parking spaces.

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PayByPhone is also operating U.S.-based mobile-payment programs in Miami, Dallas, Seattle, Fort Lauderdale, and Boston.

So far, PayByPhone, a unit of U.K. payments processor PayPoint, has restricted itself to the major card brands, though Arnold said alternative-payment providers have expressed interest. “All the wallet providers want their button on our app,” he said. “We’re interested but we don’t want 130 wallets to choose from when you’re just paying for parking.”