The city of Indianapolis has seen a significant jump in parking revenue after adopting technology from Xerox, replacing antiquated meters with new ones that accept debit, credit and mobile payments.
"The city had not increased rates in 30 years and it really was unable to do that because the meters only accepted coins," says Matt Darst, vice president of parking and justice solutions at Xerox. "One of the primary benefits of moving to credit and debit card payments is the flexibility it provides in setting policy."
The modern parking system, called ParkIndy, was installed in 2012. It allowed the city to increase parking rates without motorists complaining because users saw a benefit in customer service.
"Under the old system our city sidewalks where littered with rusty, barely functioning, decades old technology that only took coins and didn't work that well," says Marc Lotter, communications director with the City of Indianapolis.
In 2010, before the ParkIndy system, the city received $339,165 in net revenue from parking services, including fees and infractions, says Lotter. Last year, with the ParkIndy system, the city made $3,066,000 in net revenue, which is ten times the revenue it earned before, he says.
"And all that revenue goes into infrastructure funds that go towards sidewalks, streets and other city maintenance," says Lotter.
ParkIndy also allows consumers to refill the meters from the Parkmobile app with a linked payment card or PayPal account. The app sends a text message about 15 minutes before the time on the meter will expire.
Card and mobile payments account for 79% of all parking purchases in Indianapolis, says Darst.
About 14% of all payments made at the parking meters are made with a mobile device, he says. About 98% of people who pay through a phone are using the Parkmobile app, while 2% call customer service to pay.
Half of ParkIndy's mobile payment volume came from the past six months due to heightened publicity from the city and Xerox, says Darst.
Xerox works with several others cities on their parking systems, including Boston, Los Angeles, San Francisco and Washington D.C.
Washington, which implemented Parkmobile several years ago, sees nearly 54% of its parking revenue made by customers paying with their mobile device, Darst says.
The new parking meters have also had tangential effects. Because the meters have raised the time limit from two hours to eight to ten hours, people decide to park outside the most congested downtown area, freeing up traffic, says Darst.
Plus the new meters benefit local merchants by making parking more practical for business owners, says Lotter. "Before, business owners would park outside their shop for the whole day" so they could easily refill the meter every two hours, he says. The longer parking times allow merchants to park farther away from their shops.
And 73% of Indianapolis residents said parking was affordable, with 40% saying it's easy to find parking downtown, according to a study by Indianapolis Downtown Inc. These percentages are far higher than the national average, it says.
The Parkmobile app also allows users to see where the nearest parking spot is open, and there's a complementary app available that allows people to find their cars if they forgot where they parked, says Lotter.
Mobile payments "is where the industry is headed," Darst says. Shifting to mobile allows cities to eliminate costly infrastructure. "If people are paying by phone you can start reducing the number of meters or pay boxes you have on the street."
Some Xerox client cities in Europe accept only mobile payments, he says.
Xerox is one of the many companies that have recently moved into the payments market, seeing potential to facilitate money movement for their existing customer bases. Xerox bought a parking systems company in 2010.
The automobile and transportation industry is quickly becoming infiltrated with payment technology, as companies look to modernize old systems that don't allow for consumer choice with payment methods.
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Corrected May 13, 2014 at 1:10PM: An earlier version of this story misspelled Matt Darst's name.