/ PARKING & MOBILITY SPOTLIGHT/PAYMENTS
Mobile Payments in Parking: What Cities Need to Know By Michael Mintz
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OLLOWING THE COVID-19 CRISIS, one thing is certain: Use of contactless and mobile
payments is going to increase significantly as cities implement best practices to keep the public safe. Mobile payments only account for approximately 20 percent of today’s parking payments. However, with the expanded focus on touchless technologies and sanitation, that number is about to explode. Higher convenience fees generally mean the payby-cell provider is paying the merchant fees as part of their contract with the city. Merchant processing fees vary and, in many cases, are a direct expense to the city. As with their other operating expenses, cities should look to minimize the convenience fee charged to consumers whenever possible.
One or Multiple Platforms?
How Does the Convenience Fee Work? Most cities using pay-by-cell for their parking payments have a convenience fee charged at the point of sale. On average, that $2 parking session will cost $2.35, or even $2.50 depending on what city you are in, what pay-by-cell platform is operating, or if the convenience fee includes credit card processing. 10 PARKING & MOBILITY / SEPTEMBER 2020 / PARKING-MOBILITY.ORG
Offer the Mobile Wallet to Consumers? The market has clearly spoken on this topic with the majority of mobile transactions being conducted as one-off transactions and not using the mobile wallet offered by providers. This trend will likely continue with consumers not wanting to tie up their money into an escrow account they may not ever use. The less discussed topic regarding the mobile wallet is the fee charged to the customer every time a mobile wallet
SHUTTERSTOCK / LDPROD
Luckily for city parking operations, there are plenty of options to choose from. In addition, virtually all parking meter and pay station providers have developed their own parking apps, translating into various options for cities. One recent entrant provides a centralized parking payment database with a fully-integrated, multi-app payment management system. Whether your parking operation currently runs a pay-by-cell program or you are planning to go out for RFP in the near future, there are various pieces to the mobile payment process every operator should be aware of.
Look around the U.S. today and the majority of the cities that have implemented a pay-by-cell parking program have chosen to work with specific providers. If you are a frequent traveler, you probably have a parking folder on your smartphone with a minimum of three to four mobile parking apps. Is this the best solution for the city and the consumer? Should consumers have multiple options no matter where they park? The post COVID-19 push to contactless payment will likely encourage cities to offer multiple parking app options with the end goal of driving adoption rates as quickly as possible. In addition, as cities rely more heavily on contactless/pay-by-cell solutions, there is more risk of lost revenue if their chosen payby-cell app has a technical issue.