Cumberland Farms, a Framingham, Mass.-based chain of convenience stores with locations across the Northeast, is testing a new mobile payment program called SmartPay — and tempting customers with a 5 cent per gallon discount to help them test it.

According to a post on boston.com, Cumberland Farms' app was developed with Fig Card, the company acquired last year by PayPal. The system uses PayPal to route the payments and requires that users have a PayPal account to use it. Versions are available for iPhone and Android devices as well as a web version for other devices.

To use the service, users first log in to their PayPal account. The app uses the phone's GPS to determing which store the consumer is near. The user then selects the pump number, authorizes a payment and the pump is unlocked and ready to dispense gas. A receipt is emailed to the user after the transaction.

And what about warnings not to use a cellphone near a gas pump? From the story:

"Dave Banks, the chief information officer of Cumberland Farms, said there were no known incidents of mobile phones sparking fires or explosions. (Static electricity is another matter.) And the company has had to get approvals from fire departments in each of the towns where it is deploying the SmartPay app."

 Cumberland Farms is looking to roll out the pilot program across all of its 600 locations at some point, and will likely continue the discount program as well.

For more stories like this, visit the Loyalty Program research center.