Parkmobile is reacting to changes in the payment market by introducing a simpler way for users in the District of Columbia to feed parking meters.
The company, which has been providing a mobile payment alternative to pay for metered parking spots in the D.C. area since last year, is now offering the Parkmobile Wallet. It's an FDIC-insured stored value account that users can access to pay for parking time at meters around the city.
"Our partnership with the District Department of Transportation is exciting and valuable. We have more than 400,000 members and eclipsed 4.5 million transactions in The District alone since the launch of the service in July of 2011," said Albert Bogaard, CEO of Parkmobile USA Inc. "With the continued success of the mobile payment solution Parkmobile wants to offer parkers an added convenience."
Interestingly, Parkmobile is crediting (blaming?) the enactment of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act for the development of its mobile wallet app.
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The Durbin Amendment placed restrictions on how much credit card brands could charge for debit card transactions. The result was that those same brands sought to recapture that lost revenue by eliminating discounts they had offered on small-dollar transactions. That meant the Durbin Amendment actually raised the transaction costs on small purchases.
Purchases don't get much smaller than time on a parking meter. That meant Parkmobile was getting socked with fees that ate the small portion of parking meter fees they collected. By creating a mobile wallet, Parkmobile can now process larger dollar transactions when users top up their accounts and are no longer subject to a transaction fee every time users charge their parking fee to a debit card.
To encourage members to begin using the new mobile wallet tool, Parkmobile will offer users a reduced fee on transactions through the app.
"Many members are already using a wallet program such as E-ZPass and many retail stores offer similar convenient payment solutions," said Parkmobile EVP Lauren Eckelboom. "Members will pay a lower transaction fee of $0.30 when they utilize the Parkmobile Wallet as a payment method in D.C."
Users can continue to use existing payment methods, but due to increased cost related to the Durbin Amendment, the transaction fee will be changed from $0.32 to $0.45, Eckelboom said. That's a big difference on a charge that's likely only a few dollars at most.
Eckelboom said the Parkmobile Wallet will be introduced soon in other cities served by the company.
Parkmobile members can update their payment method to a Parkmobile Wallet online or download the app on either an iOS or Android device.
For more stories like this, visit the mobile/virtual wallet research center.