It's becoming more common to tap your smartphone at Walgreens to pay for cough drops or McDonald's to buy a Quarter Pounder with Cheese. Waving your phone at a gas pump may be next on the list.
Visa and Chevron on Tuesday announced an initiative to bring some of the first mobile payments-enabled gas pumps to California. Starting later this fall, people will be able to use Apple Pay, Samsung Pay or Google's Android Pay to pay for gas at more than 20 Chevron stations around San Francisco and Silicon Valley. The announcement is a significant step forward for Chevron's plans, after it started dabbling with mobile payment-powered pumps last year.
"Consumers will begin to see transformational ways of making payments that are more convenient and more secure," Jim McCarthy, Visa's executive vice president of innovation and strategic partnerships, said in an interview. "We, like Chevron, see mobile as the future."
While mobile payments technology is already available inside many gas station stores, the Visa and Chevron partnership joins a few, smaller efforts to bring mobile payments outside to gas pumps. ExxonMobil in 2013 launched the mobile app Speedpass+ for some US stations, while Shell teamed up with PayPal this year to create the app Fill Up & Go in the UK. Both apps use QR codes, which require users to take pictures of codes at gas pumps to register their payments.
In comparison, the Chevron stations will use NFC technology, allowing users to tap their devices on a panel at the pump, instead of taking a pictures.
Visa and Chevron are hoping to catch on to the growing popularity of mobile payments, which is expected to explode in the coming years following a long stretch of weak consumer adoption. Many more customers are expected to start using their smartphone to buy items in stores now that three of the biggest tech companies in the world -- Apple, Google and Samsung -- have introduced new mobile-payments platforms over the past year. Now, worldwide mobile payments are predicted to reach $1 trillion in value by 2017, more than double 2015's estimated total, researcher IDC said in August.
The new Chevron pumps will allow people to pay using any major credit card or bank card, not just Visa. McCarthy said his company wanted to include competing credit cards to help spur the growth of mobile payments, with the expectation that Visa, as the market leader, will benefit disproportionately to others.
Adding the NFC panels won't come cheap. Glenn Johnson, a Chevron marketing general manager, said such systems can cost from $10,000 to $100,000 per site. So, placing such technology in the company's roughly 8,000 Texaco- and Chevron-branded stations in the US would run into the millions of dollars. Still, the companies said there was no announcement on any future expansions quite yet.
"We'll get some great learnings from this," McCarthy said. "Things take awhile to mature in the payments space, so I would say we're in early innings."