Payments Innovation in the Petroleum Sector

Navigator Edition: March 2017
By: Ryan Douglas and Sage Stahmer

In the past few years, there has been an uptick in digital innovation in the petroleum sector, specifically with respect to payments.  Fuel retailers are constantly trying to find innovative ways to engage with consumers and create a more seamless process of paying at the pump.  In terms of digital advancement, petroleum companies began by launching proprietary mobile applications that allow consumers to easily find stations, and have become more and more sophisticated ever since, leading to a wave of mobile payment solutions available in the market today.  See Figure 1 for a timeline of notable innovations over the years.

Figure 1: Timeline of Petroleum Payments Innovation

Note: dates are meant to symbolize a broader period of industry adoption, not a specific moment in time.
Source: Company Websites and Public Data.

In 2011, Murphy USA launched “MurPay” as a way to pay for gas using a phone.  The solution uses ACH payment technology and allows customers to text Murphy USA to receive a code used at the pump for authorization.  In the years following, other petroleum companies have instituted their own mobile payment solutions that broadly fall into three categories: proprietary app with geolocation, proprietary app with NFC, and third party wallet acceptance (e.g., Apple Pay, Android Pay, etc.).  Please see Figure 2 for a sample of petroleum mobile wallet offers and their features / functionality.

Figure 2: Sample of U.S. Consumer Mobile Wallet Market Offerings

1 Pilot expected to launch Spring, 2017.
2 Undergoing renovations and is not available for download.
3 Or best gas price of the past 24 hours, whichever is less.
4 Have PayPal mobile solution “Fill Up & Go” in the UK.
Source: Company Websites and Public Data.

Of those developing their own mobile payment enablement, the most prominent solution by far is geolocation technology (Alltown, ExxonMobil, Cumberland, and Sinclair to name a few).  Unlike NFC, where a user must have their phone near the payment terminal to complete a transaction, customers using an app with geolocation technology can pay for gas within the comfort of their vehicle, only getting out to pump gas.  Apps that use this technology use a customer’s location to determine which station he or she is at.  Then, users enter a pump number into their phone and are ready for fueling.  Some solutions, like Speedpass+, allow users to scan a barcode on the pump to pay if location services are not available.  A less common solution is a proprietary wallet that uses NFC technology for payments such as Gulf Oil’s recently announced solution, Gulf Pay.

Our research suggests that if a fuel retailer is going to enable NFC capabilities at the pump, they are more likely to enable third party wallets rather than create their own.  Some examples of this include: Chevron and Shell, who accept Apple, Android, and Samsung Pay and Phillips 66, who accepts Chase Pay. Many fuel retailers accept third party mobile wallets in the convenience store, but fewer accept NFC payments at the pump.

One advantage of having a proprietary mobile payment solution is the ability to offer additional fuel discounts at the pump.  Murphy USA, Cumberland Farms, and MAPCO all offer a fuel discount when paying via their mobile app (this discount is in addition to rewards offered on other tender types).

Although it does not offer a discount, ExxonMobil’s Speedpass+ has a number of other unique features.  While most wallets only allow one payment type (credit card, or PayPal, or ACH, etc.), Speedpass+ users can pay by credit, debit, ACH, or Apple Pay all within the app. The app also allows users to pay with Exxon’s branded private label card (the Smart Card).  And, as mentioned previously, if the geolocation service is not working, customers have the option to scan a barcode specific to their pump to initialize the mobile payment process.

Recently, some major fuel retailers have embarked on a unique concept by partnering with car manufacturers to incorporate their mobile wallet directly into cars’ displays.  This is the latest example of an effort to streamline the customer experience of paying for gas, drive loyalty to their brand, and foster increased adoption of their mobile solution.  With this new solution, users do not need to take out their wallet or phone to complete a transaction, and some solutions have an option to pay using only voice controls.  Two prominent market examples of this technology are ExxonMobil / Ford in the U.S. and Shell / Jaguar in the U.K.  See Figure 3 for a demonstration of the ExxonMobil / Ford solution.  The ExxonMobil technology is in pilot phase and expected to go live in the coming months, and Jaguar has indicated that they plan to roll out the technology internationally sometime in the future.

Figure 3: ExxonMobil / Ford In-Car Payment Solution

Source: Ford Press Release – Jan 4, 2017.

As petroleum companies continue to invest and innovate around the consumer payment touchpoint, they will be looking for ways to create a more seamless and unique experience in order to drive incremental sales (both at the pump and in convenience stores).  In the future, we expect to see some petroleum companies provision their own branded credit cards (both co-brand and private label) into third party mobile wallets (e.g., Apple Pay, Samsung Pay) as a means to offer mobile payments without having to develop their own wallet solutions. We will continue to monitor these developments as they occur and look forward to seeing the payments innovations that are yet to come.

For more information, please contact Ryan Douglas, Manager,; or Sage Stahmer, Analyst, Both specialize in Credit Card Issuing.

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