Decoupled Debit Scheme Pulls Up at the VeriFone Fuel Pump

Consumers this fall will be able to use their smart phones to pay for fuel at certain gas stations that use VeriFone Systems Inc. technology and offer National Payment Card Association’s mobile-payment app, VeriFone announced Monday.

Point-of-sale terminal maker VeriFone says convenience store and gas station operators using its Smart Fuel Controller, which controls the pump and POS operations, will be able to accept NPCA mobile payments when the service debuts in November.

National Payment Card Association offers retailers PIN-debit cards that are associated with a consumer’s checking account. NPCA’s cards, which double as loyalty and rewards vehicles, link to the cardholder’s checking account via the low-cost automated clearinghouse system. They are decoupled in the sense that the merchant issuer is not the same entity that holds the cardholder’s funds.

NPCA charges merchants an 18-cent per transaction fee and one-time authentication fee of 84 cents per consumer enrollment, says Danilo Portal, chief operating officer of Coconut Creek, Fla.-based NPCA.

The integration with San Jose, Calif.-based VeriFone is important to NPCA because of the volume of merchants that use the fuel control and POS technology, he says. “Interfacing with them and to others is very important to us,” Portal says. More than 1,000 gas stations that use VeriFone systems and are part of the NPCA system could use the mobile-payment app when it launches, says Portal. “Installation will begin in November,” he says.

Merchants will be able to offer the NPCA transaction capability as a funding option on a digital-wallet app and offer inducements to customers to adopt the option. Merchants will also garner data on cardholder visits and purchases, along with email addresses and phone numbers for promotions.

Portal expects mobile payments will be a large part of NPCA’s overall transactions. At Cumberland Farms, a Framingham, Mass.-based convenience store chain with almost 600 locations, about 30% of the transactions that go through NPCA are mobile-based, Portal says. Cumberland Farms offers SmartPay, a mobile app available for Apple Inc. iOS devices and smart phones using Google Inc.’s Android software. A SmartPay card also is available. Consumers receive a 10-cent per gallon discount when they use the SmartPay app or card.

To use the SmartPay app, the consumer opens the app and selects whether to pay at the pump or inside the store. At the pump, the consumer selects pay at the pump and enters her PIN into the app. The app, because it uses the geo-location technology built into the smart phone, displays the consumer’s location within the app for verification. Then she enters the pump number, and confirms the location. Authorization begins at the pump and the price is adjusted if necessary. After completing fueling, the consumer is prompted for a receipt at the pump and the sale is automatically displayed in the app.

For inside payments, the app generates a bar code that the sales clerk scans to complete the transaction after the consumer enters a PIN.