Chevron is bringing mobile payments to select branded gas stations in California this fall via a partnership with Visa, proving that consumers are increasingly clamoring for seamless ways to pay at the pump via their smartphones.

The two brands are collaborating on a mobile payments program that is set to roll out at more than 20 Chevron gas stations in Silicon Valley and San Francisco within the coming weeks. The payments industry’s gradual shift to digital suggests that more petrol companies will jump at the chance to integrate with mobile payment platforms in a bid to attract more consumers who may not always carry cash or credit cards with them.

“We are continually looking for ways to improve the customer experience at our stations and expect that the adoption of newer mobile devices will lead to more consumers using this technology,” said Doris Lee, head of loyalty at Chevron, San Ramon, CA. “Chevron strives to provide a range of convenient and secure payment options for customers.”

New industry adoption
Mobile payments continue to branch into new industries as consumer and merchant adoption alike becomes more widespread. Chevron estimates that approximately 80 percent of its customers pay at the pump with their debit or credit cards, suggesting that cash payments are on their way out as the world evolves into a more digitized one.

More consumers are appreciating the ability to use their mobile devices when paying for weekly necessities such as gas and groceries. When paying at a Chevron pump, a customer can simply hop out of his or her vehicle and tap his or her device against a terminal to complete the transaction.

Each transaction is authorized via the Visa Token Service, which leverages unique digital identifiers to accept users’ payments without revealing personal account information.

Consequently, customers can feel assured that their data will be transferred in a secure environment.

Visa and Chevron are promoting their collaboration by rolling out a YouTube video featuring soccer star Carli Lloyd, showing the several-second-long process of paying at the pump via a smartphone.

The digitization of payments also posits that wearables including the Apple Watch and activity trackers may soon replace consumers’ physical wallets. Cash could become increasingly less commonplace if individuals are bestowed with the ability to pay for gas, groceries and other daily or weekly items by waving their wrists or tapping their smartphones against an NFC terminal.

Payment transaction volume on wearables will reach $501 billion by 2020, growing at a compound annual growth rate of 177 percent and representing 20 percent of total mobile proximity transaction volume, according to a summertime report from Tractica (see story).

Mobile and petrol companies
Chevron is not the only gas station marketer introducing this functionality to its customers.

This past July, Shell began its rollout of the PayPal-enabled Fill Up and Go service across gas stations in Britain, which allows customers to download the Shell Motorist application and scan a QR code to pay at the pump with their smartphones (see story).

Additionally, Cumberland Farms has released a mobile-enabled gas discount program called SmartPay, which enables users to pay at the pump via their personal device and save 10 cents for each gallon of gas purchased. Each time a customer buys 30 gallons via SmartPay, he or she will receive a mobile offer for a free cup of Farmhouse Blend coffee.

Once mobile payment adoption at gas stations grows, financial institutions and petrol companies may be forced to provide rewards programs to users if the strategy gains traction.

“While it is still early, initial consumer response to the two sites where we have offered outdoor contactless capability since July has been positive,” Ms. Lee said. “Many consumers are already interested in using this payment method and we anticipate that number will grow with new mobile device adoption.”

Final Take
Alex Samuely, staff writer on Mobile Commerce Daily, New York