Galveston sees payback from mobile parking payments app

March 11, 2014 | by Robin Arnfield

Galveston, Texas, has become the first sizeable city in the U.S. to move directly to mobile parking payments without having previously installed parking meters, according to an announcement from payment gateway provider and EMV migration expert CreditCall. The city rolled out a mobile parking payment service from parking industry mobile payments provider PayByPhone, and supported by CreditCall, in September, and has already seen a significant return on investment — with 34,000 drivers signing up within the first three months and 50,000 transactions generated in the first 160 days.

PayByPhone's system has been deployed along the 10-mile Galveston Seawall area, which is a popular tourist destination. "The city of Galveston needed to generate revenues to improve the facilities at its seawall," said Barrie Arnold, chief commercial officer at PayByPhone North America. "For many years, there was no paid parking in Galveston."

The city took the view that contracting out the installation and operation of meters in the Seawall area would take four years to achieve a ROI, Arnold said. "This investment would have needed approval from the city's taxpayers, but the city couldn't make a business case for using meters because of the high cost of installation and operation," he said. "Nearly all the revenues generated from the meters would have gone back to the contractor."

"Upgrading to parking meters to enable card payments would have cost millions of taxpayer dollars in equipment and yearly maintenance fees," Galveston Police Officer Sean Migues said in a statement.


The sole cost to Galveston from using PayByPhone was to install 550 signs explaining to drivers how to use the service. "Cities wanting to deploy PayByPhone just have to display stickers on their meters," according to Arnold. "This is their only up-front expense. We have no monthly fees, and we take a small percentage of each parking transaction."

To cater for people who either don't have mobile phones or credit cards, PayByPhone has set up a retail network in Galveston where people can pay for parking with cash. "The retailer logs into our system and enters the customer's license plate number and parking lot number," Arnold said.

"Galveston's ROI was very rapid," Arnold said. In the first three months since the city's system went live, 34,000 drivers signed up, and 50,000 transactions were generated in the first 160 days of operation, according to Galveston Mayor Lewis Rosen.

"Galveston expects to generate $650,000-$700,000 in revenues per year in the first five years from PayByPhone," Arnold said.

To use PayByPhone, customers have to sign up for an account at the firm's mobile website, by using the PayByPhone app or calling a free interactive voice response number. "Customers need to register their name, license plate number, mobile phone number which becomes their account number, a PIN, and a credit or debit card number," Arnold said. "When they want to pay for parking through PayByPhone, they have to enter a parking location number and the amount of time they want to buy."

Customers receive notifications on their phone that their paid-up parking time is about to expire. They can then pay for extra time using PayByPhone, which will update the city's parking enforcement system in real time. PayByPhone provides customers with parking receipts via email or online.

PayByPhone has updated its signage to encourage consumers to use its app and mobile website for payments, instead of making payments via IVR. "When cities display our new signs, we find that 80 percent of transactions involve our app or mobile website, and the remainder come via IVR," Arnold said.


PayByPhone was founded in Vancouver, Canada, in 2001 and was originally known as Verrus Mobile Technologies. It changed its name to PayByPhone after being acquired by U.K. payment services firm PayPoint in March 2010. PayPoint operates a network of retail terminals in the U.K. and Romania where people can pay with cash for bills.

Currently, PayByPhone's largest installation is in San Francisco. The company also provides its service in Boston, Miami and Seattle in the U.S.; Ottawa and Vancouver in Canada; and in a number of boroughs in London in the U.K.

In Boston, PayByPhone is available on 83 Massachusetts Bay Transportation Authority operated parking facilities along the commuter rail lines in the Boston metro area. PayByPhone announced in March 2014 that MBTA had completed the switch from its previous provider. In its first month of service in Boston, PayByPhone processed 122,000 MBTA parking transactions, sold over 2,000 monthly e-permits and signed up 17,000 accounts, the company said.

"We are carrying out a pilot in New York City, and have just won the contract to provide mobile parking payments in Paris, which has 151,000 parking spaces, compared to 31,000 in San Francisco," Arnold said.

PayByPhone has 7.5 million registered users and is adding more than 100,000 new users every month, according to the company. In 2013, it processed 22.5 million transactions.

PayByPhone is now moving beyond parking payments into the general area of urban mobility. "We're looking to extend our platform to all modes of transport, for example buses, taxis and subways," Arnold said. "In Vancouver, drivers can pay tolls by PayByPhone at the Port Mann Bridge, and in Nice, France, you can rent bicycles using our system. In Paris, France, we have implemented our technology with taxi operator Taxis Bleus so people can pay with their phone instead of handing over a credit card to the driver."


U.K.- and U.S.-based CreditCall provides payments gateway services linking PayByPhone to its customers' payments processors in the U.K., U.S. and Canada.

"We provide gateway services for any firm that operates unattended kiosks or payment stations accepting credit or debit cards," said Dave Witts, president of U.S. Payment Systems at CreditCall. "In North America, we have been successful with unattended parking payments. We are seeing more and more mobile parking payments ramp up, as consumer adoption is high."

In addition to PayByPhone, CreditCall also provides payments gateways to two other U.S. mobile parking payments providers, QuickPay and ParkNow. In the U.S., CreditCall is certified with the eight largest payment processors, the company said.

CreditCall offers its clients a back-office system called WebMIS which provides them with reports on payments. "This is particularly useful in cities such as Seattle which have both parking meters and PayByPhone," Witts said. "Seattle uses Parkeon for its card-accepting parking meters, and on WebMIS it can see both Parkeon and PayByPhone payments."


PayByPhone works with cities to put the rates for their different parking locations onto the PayByPhone system. "We integrate with their parking enforcement system, so that a parking enforcement officer can see on their handheld device which drivers have used PayByPhone to pay for their parking," Arnold said. "We are able to do this as our software is integrated with all the major parking enforcement software platforms."

PayByPhone offers a range of search options for parking enforcement officers, including searching by license plate number or space number.

If a city doesn't integrate its parking enforcement system with PayByPhone, its parking enforcement officers can still tell which drivers have paid via PayByPhone. "The drawback is that the officers will need to carry a separate Internet-connected phone or tablet as well as their handheld device," Arnold said. "We provide them with a secure website where they can view PayByPhone parking payments on their smartphone."


In a number of major cities including San Francisco, Seattle and Ottawa, PayByPhone has deployed NFC technology in its signage.

"In our NFC-enabled environments, the decals and stickers on the meters contain a uniquely programmed NFC chip which not only launches the PayByPhone app, but also populates the parking location and space number automatically in the app," Arnold said. "The user then just has to enter their required parking time and confirm payment."

Topics: Contactless / NFC , In-App Payments , Trends / Statistics

Robin Arnfield / Robin Arnfield has been a technology journalist since 1983. His work has been published by ATM Marketplace, Bank Technology News, Cards & Payments,Cards International, Electronic Payments International, Retail Banker International, Kiosk Marketplace, Mobile Payments Today, Virtual Currency Today, and The Guardian.

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