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their credit card number (stored on file). This card is associated with a cell phone number and possibly a license plate. Every park-by-phone transaction is recorded and then later billed to the card on file. (Interestingly, if the North American cellular providers would just open up their billing systems to enable payment for non-cellular transactions, then this entire model would be upended—overseas you can buy a Coke, gain admission to events, and even pay for parking, all on your cell-phone bill.) One final example of backed-by-a-credit-card transaction is the growing use of near-field communications (NFC), a growing trend in Europe that is now being introduced to North America. The idea of NFC is simple: a computer chip is encoded with a unique account number, and this account is backed by a credit card. Each time a parker (or consumer) brings the NFC chip sufficiently close to an NFC reader, there is a secure communication to debit the consumer’s account. Just like EZ-Pass, but in a much smaller package and with a much smaller read-range. The Almighty Credit Card is even getting even more pervasive. Loyalty point programs associated with credit cards encourage cardholders to run every possible transaction through the credit card—big or small. It’s not uncommon to see consumers (particularly the younger generation) use a credit card for sub-$1 transactions. Aye, there’s the rub. The Payment Card Industry caters to the needs of the cardholder (for whom the transaction is always free) while the cost of each

transaction is borne by the merchant. On a percentage basis, the merchant pays much more for a small transaction than a large one—not including the additional costs of complying with ever-changing data security standards published by the PCI. One way to reduce processing costs is to use micropayment aggregation, where transactions are rolled together before billing. For example, Apple uses this in the iTunes model: the 99 cents song purchase doesn’t run against the credit card until the end of the month, at which time all purchases are summed and run as a single credit card transaction. This model can work in parking too, with a little additional effort. The individual parking operations would then have to decide if this type of payment aggregation and the potential risk of losing small amounts of revenue through delayed processing, is worth the cost benefits. Supporting credit card payments is a near necessity for today’s parking operation. Despite the cost and liability there are still significant advantages—significantly increased revenue capture, a much-improved audit trail, and of course the increased convenience for your parkers. With the omnipresence of the Almighty Credit Card in parking it’s no wonder your cash is disappearing! 
Blake Laufer is a self-proclaimed “technology nerd” who just happens to have fallen into the world of parking. He leads Product Development at parking technology provider T2 Systems. He can be reached at blaufer@T2systems.com. Zack Harmeyer is a parking manager-turned-product manager, also at T2 Systems. He can be reached at zharmeyer @T2systems.com.

Marketing Minute Continued...
As President of SRAM, the world’s second largest producer of bicycle components, his vision was to make a simple, single speed, durable, loadcarrying bicycle to offer transportation to those who were without. His trip to Thailand sparked his dream to make a bicycle available to those living in Africa. His vision has given the average African worker three more hours a day with his or her family, because riding a simple bike to and from work saves three hours a day from walking. As my family rode our bikes along the Straights of Mackinac, I couldn’t help but reflect on these leaders and their shared vision. Visionaries well ahead of their time are changing the world each day. Dare to dream … dare to be ridiculed … dare to be unpopular … dare to be a visionary! 
Jeff Pinyot is the founder and vice president of business development for ECO Parking Lights. He can be reached at jspinyot@ecoparkinglights.com.
www.npapark.org PARKING October 2010

Parking October 2010

Table of Contents for the Digital Edition of Parking October 2010