PayPal Foray

Cumberland Farms CIO talks mobile payment

Greg Lindenberg, Editor, CSP

FRAMINGHAM, Mass. -- Cumberland Farms recently announced its launch of a mobile payments project allowing customers to pay for fuel and convenience store goods with their smartphones. The project is in partnership with Internet-payments processor PayPal. David Banks, CIO for Cumberland Farms provided CSP Daily News with some insight into the project.

(See Related Content below for previous CSP Daily News coverage. And for more on mobile payments at c-stores watch for CSP magazine's May issue and its special technology section.)

Q: What is Cumberland Farms strategy behind the SmartPay offering?

A: One of our key goals is demand generation, to tap into this dramatically growing base of smartphone users and drive them to the stores using mobile advertising. Other important goals include providing a fast, convenient payment alternative, providing incentives for pay-at-the-pump customers to shop inside and to establish a platform to offer more innovative smartphone products in the near future.

Q: How has the initial sign-up and interest in general been tracking for the new offering?

A: It has been great--everyone has been really positive about it and it's definitely generated a buzz.

Q: How have customers been handling the "learning curve"?

A: We haven't had any feedback about the fire hazard mentioned in the Boston Globe article. The app was launched only a week ago, so we are still in the process of collecting customer feedback. As we learn more about how the app can be enhanced, we will continue to fine-tune the design and technology to make it an optimal user experience.

Q: How long will the five-cents-per-gallon discount be available?

A: This is a pilot program, and based on the results of the program, we will make a determination on how to move forward.

Q: You're ahead of the curve on mobile payment. Can you tell us why you decided to move before most of the competition and what your biggest challenges and concerns are at this point?

A: We are in a very competitive business, so we are always looking for ways to get a leg up on the competition. We see mobile payment adoption becoming more widespread, and for us, it was critical to continue to evolve the customer experience to meet changing needs. The biggest challenge is developing something today that we can build on and stay flexible as the marketplace and technology evolves. Not only is technology rapidly changing, but so are our lifestyles.

Q: Does this process involve near-field communication (NFC)? It doesn't appear to. We hear NFC is the leading technology for this form of payment. What do you think? And why did you decide to go the app route?

A: It does not involve NFC. NFC would have been prohibitively expensive at the pump, and widespread availability on smartphones is still a way off. We wanted to get the SmartPay program out there quickly, and keep it flexible so we could adapt quickly to consumer response.

Q: Why was it important to tie a loyalty piece and gas discounts to this program?

A: For customers, we want to streamline the process of fueling and payment, making the experience faster and more convenient. Because SmartPay is only available at Cumberland Farms, the advantage for us is that we drive new and repeat traffic, as well as build customer loyalty. Also, with consumer concerns over the rising cost of gas, the 5-cent-per-gallon discount gave us an opportunity to bring value to our customers.

Q: What do you think will be the next steps for mobile payment?

A: We do see mobile payment growing in many directions, and becoming a huge force in how merchants do business, both online and brick and mortar. For us, it could mean mobile coupons, exclusive offers and another way to reach customers. SmartPay gives us the foundation to be in a leadership position in mobile commerce as the market evolves.