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Wi-Fi finds no space on the forecourt

Limited potential for wireless and mobile payment solutions

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Wi-Fi and mobile payment solutions still to prove their worth in forecourt self-service Globally, almost 30 per cent of petrol forecourts offer automated payment systems, and in certain markets 90-100 per cent of sites operate at least one outdoor payment terminal. Here, we argue that forecourt retailers should still be focussing their attentions on traditional automated payment solutions rather than the latest 'innovative' alternatives.

Fuel retailers' primary objectives are to protect market share, attract more customers and increase site efficiency. Self-service payment solutions can contribute to boosting throughput by up to 25 per cent and reduce operating costs, allowing fuel retailers to remain competitive in the face of increased fuel prices.

In supermarkets, where space is less limited, self-scanners and store navigators can be attached to shopping trolleys that are then docked at the checkout for payment. This ensures less congestion at the till.

However, the story is different when it comes to convenience retailers on the forecourt and these options have, as yet, very limited potential. The average customer visiting a convenience retail outlet on the forecourt spends only two and a half minutes in the shop, and just 40 seconds in the queue. Space is very limited and there is greater opportunity for fraud, as monitoring customers is more difficult. Technology needs to be improved, supply costs reduced and customers need to become more au fait with the concept before this group of convenience retailers is willing to invest.

Consumer fear

A major barrier exists with customer 'fear' of using mobile phones to make mobile payments. There is a lack of trust in the technology and worry about getting it wrong. Moreover, the majority of people do not own mobiles compatible with the mobile payment option at the moment for it to be seriously considered, and the credit risk attached is significant enough to cause banks and forecourt retailers to be more hesitant.

Pay-as-you-go customers would be excluded, or would have to pay upfront for large amounts of credit on their mobile phones, thus defeating the point of convenient mobile payment. Issues with banks, mobile phone companies and providers of the technology all minimize the potential for further expansion of the mobile payment offering on the forecourt.

Limitations

Given current limitations, there is almost no potential for Wi-Fi beyond being offered in selected sites for a specified audience. Internet access via Wi-Fi should be used as a customer service offering on a limited number of sites on arterial roads, but not as a payment method in the foreseeable future.

In the short term, heavy investment is needed for Wi-Fi to become a viable option, and for most fuel retailers, usage is restricted to only certain types of forecourt, mainly on arterial roads. Most are hesitant to lead the way and it will take a few brave souls to make their mark before others are convinced of the benefits.

Forecourt retailers should focus their attention on traditional automated payment solutions such as pay-at-the-pump, standalone outdoor payment terminals or RFID transponders, rather than other 'innovative' alternatives that are less suitable for forecourt implementation.

Source: Datamonitor

Related research

Datamonitor, "Convenience Retailing on the European Forecourt to 2007" (DMEN0268)

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