An Arco gas station in Santa Monica, CA saw mobile represent six percent of sales after one month of rolling out a mobile wallet.

The Arco gas station is one of two stores in southern California that is piloting a mobile wallet that lets consumers pay for gas from inside their cars. The mobile wallet is powered by Kuapay.

“Gas stations can be hotbeds for fraud,” said Joaquin Ayuso de Paul, CEO/founder at Kuapay, Santa Monica, CA.

“Thieves will stealthily install credit card skimmers so that when patrons pay for gas, their credit card numbers are stolen,” he said. “Kuapay eliminates this risk with its secure point-of-sale.

“In addition, gas station owners now have a real-time channel to connect with individual customers and encourage convenience store visitation, where profit margins are much more important to the viability of the gas station.”

How it works
The mobile wallet service is being tested at a 76 Gas location in the Pacific Palisades and at the Arco location in Santa Monica.

Consumers at either gas station see a call-to-action with a QR code promoted at the pump.

The QR code prompts users to download the Kuapay mobile app that can be connected with a credit card to pay at the pump.

The Kuapay app is available for iPhone and Android devices.

The app leverages a built-in camera feature to expedite the process of entering credit card information. Credit card information can also be manually typed in.

Users then find the gas station within the app’s list of merchants and stores. Next, consumers select their pump and complete the transaction.

Kuapay claims that once a consumer is registered, paying is twice as fast as a debit card or cash.

76 Gas and Arco are not the only gas stations banking on mobile to speed up the convenience store process.

For example, Cumberland Farms reported earlier this year that since launching a mobile payment app in 2012, the company saw up to an 86 percent retention rate (see story).

Increasing loyalty
A number of mobile payment options promise a quick and simple checkout to consumers, meaning that merchants are challenged to find a universal service that sticks with consumers.

Therefore loyalty and targeted offers play a big role for merchants leveraging mobile wallets for reward programs.

In this case, 76 Gas and Arco are offering consumers 50 cents off of a gallon of gas in exchange for using Kuapay, which will likely help the chains hook a group of repeat consumers.

In fact, Kuapay claims that two-thirds of its consumers are repeat users, which could be particularly useful for a gas chain in building up loyalty programs.

“Due to credit card fraud that commonly occurs at gas stations and the increased loyalty and sales a mobile wallet can provide, we expect more and more gas stations will look to provide their customers with the ability to use mobile payments at the pump,” Mr. Ayuso de Paul said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York