No app for that? Mobile parking payments vendor asks to scan a credit card instead

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Parking payments have long been a pain point for many motorists, but it's a category that has also resisted a shift to mobile or digital payments in many regions.

As with many payment categories, COVID-19 is pushing technology forward in parking payments. Consumers simply don't want to touch any hardware during the pandemic.

The field for mobile parking services has become more crowded over the years, with numerous options within individual cities and national services like Cubic, FasTrak and ParkMobile creating apps that initially sought to eliminate cash use at a parking garage gate and eventually advanced to complete transportation apps with rewards and other features attached.

Cubic's offering encompasses both parking meter hardware as well as mobile technology. ParkMobile delivered its first app to diminish cash use nearly a decade ago.

But there has been room for new players, especially in light of the higher interest in contactless methods.

For New York-based startup Spaces USA, the key to advancing mobile payments in parking garages has more to do with overcoming the physical barriers of garage entry and exit — and putting a lot more power into the phone itself.

"The biggest challenge in mobile payments for parking is that you are in a motor vehicle and in a traffic pattern in which you are rarely the only person entering or exiting the facility. It is not like standing in a line at Starbucks," said Jerry Skillett, CEO of Spaces USA.
"The biggest challenge in mobile payments for parking is that you are in a motor vehicle and in a traffic pattern in which you are rarely the only person entering or exiting the facility. It is not like standing in a line at Starbucks," said Jerry Skillett, CEO of Spaces USA.

In making the payment for a parking spot operate in a similar manner to a Zelle or Venmo P2P transfer to a mobile phone number, Spaces USA says it has solved concerns over coronavirus contamination as well as eliminated time-wasting tasks at the garage gates.

"The biggest challenge in mobile payments for parking is that you are in a motor vehicle and in a traffic pattern in which you are rarely the only person entering or exiting the facility," said Jerry Skillett, CEO of Spaces USA. "It is not like standing in a line at Starbucks where you open your mobile pay app while waiting. It's different when you are in a car, and someone is ready to honk if you are doing something that takes more than eight seconds."

That sort of scenario unfolds when trying to do any type of automated payment from the car that calls for the driver to scan a bar code or get a paper ticket.

"If you are not 5'11" and 170 pounds, you might struggle with that, or even have to get out of the car to do it," Skillett said.

Spaces USA has addressed those concerns with a system in which the driver pulling into a garage using Spaces technology sees a sign with a phone number to call that opens the gate. After entering and parking, the driver engages in a one-time payment credential process a few minutes later by receiving a text message from Spaces requesting a photo of a payment card and a ZIP code be sent via a link that opens the Stripe processing platform. Spaces never touches the payment information, which Stripe keeps PCI compliant and secure through encryption and cloud storage.

The cost of the parking is then pulled from that card account and the driver again uses the phone number to also open the gate when exiting the garage.

"Everyone knows how to dial a number on a mobile phone and they know exactly where that number is, if using the garage regularly, so it has really simplified what was a super complicated process of entering and exiting and being able to pay with a mobile device inside the car," Skillett said. "We had this process in place even before COVID, but it is really important now."

Service providers have been trying to improve the concept of mobile pay for parking and also trigger adoption for more than seven years, and COVID has compressed that effort into the last seven months, said Richard Crone, chief executive of San Carlos, Calif.-based payments consulting firm Crone Consulting LLC.

"It's for a good reason, too, because we shouldn't be touching anything right now," Crone added. "Even if you were using a self-service terminal in a parking garage, there is no way to sanitize that reader, so there has never been a better time to promote contactless payments."

Some of the problems providers have faced had to do with merchant acceptance, as there are so many parking garage operators with different physical setups and different opinions on how to use smartphones, Crone said.

"For all of these processes to work, the foundation holding it all together is the embedded payment, whether it is in an app, through a photo or some type of token," Crone said. "It must all start with an embedded payment."

In the way Spaces USA operates via money transfers to mobile phone numbers, it is setting itself up for the future Uber-like embedded payment option, Crone noted.

Spaces USA technology works in conjunction with Waze, Google Maps and Apple Maps for its proprietary vehicle logistics platform, making it easier for those seeking parking garages to find one using Spaces' contactless access and payment service.

The company currently has more than 100 garage operator clients, and is adding more than 10 a week and growing at a rapid pace since the COVID outbreak, Skillett said. Garages can completely convert to the Spaces technology, or operate it as an option in addition to their current process.

Spaces USA charges those using a garage a $1 fee on top of the parking charge, but sets up the technology and maintains it at no cost to the garage owner. Stripe processes the payments for Spaces USA, which estimates it is handling roughly 17,000 transactions a day.

Spaces USA offers an app for the consumer looking to make recurring monthly payments for the daily use of the same garage. But most find the process of dialing the phone number for payment so easy they forego the recurring billing option, Skillett said.

"In the payments space today, people are getting good at using mobile devices to make payments, and the second piece of that for us is how easy it is at the point of purchase to do it," Skillett said. "That is where parking has really been a challenge, and it wouldn't surprise me to see this sort of process done for any mobile payment challenge based on geography.

"You could do it in any store, at any place, and it just simplifies the whole payment process," he added.

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