Computer World article - Gas Station Operator Planning m-Commerce Trial
by Bob Brewin
Alon USA LP, which operates Fina gas stations and 7-Eleven outlets in the Southwest, is readying a field trial of an "m-commerce" system using existing cellular telephone technology and already-installed point-of-sale systems.
Dallas-based Alon plans to use mobile-commerce payment technology developed by Cellenium Inc. in Englewood Cliffs, N.J., that will let any cellular telephone, including aging voice-only models, conduct a mobile transaction.
Each transaction will be funneled through Dallas-based Alliance Data Systems Inc., which already provides transaction services to Alon and other gas station and convenience store operators. Alliance Data, Cellenium and Alon have formed a partnership called Cellerate to manage, market and promote their mobile-commerce system.
Jeff Morris, president and CEO of Alon, said he likes the simplicity of the Cellerate approach. Customers don't need sophisticated phones to make a payment, he said. Once a consumer signs up for the service, he needs to call a toll-free number and punch in a four-digit authorization code on his phone. He will then receive a code to enter at the pump so he can fill his tank with gas.
To induce customers to do all these things, Morris said, Alon will use a loyalty program that will reward them with goods such as free sodas or food from the convenience stores attached to the gas stations.
Shaul Shalev, president and CEO of Cellenium, said businesses don't have to drastically alter their point-of-sale systems to tap into Cellerate. Cellenium plans to install PC-based controllers attached to the point-of-sales systems at the Fina stations in Alon's test market in Lubbock, Texas. These controllers contain software to handle m-commerce transactions at the store end. They communicate with Cellenium applications developed on Oracle databases running on rack-mounted Hewlett-Packard computers in the Alliance Data server farm in Dallas.
The Oracle database contains the names of authorized customers and their authorization codes, as well as data about whether they want to charge their transactions or debit them from bank accounts or prepayment plans. Once a transaction is authorized, Shalev said, Cellerate uses the Alliance Data network to send authorization back to its PC controller at the station, which then turns on the pump.
The Cellerate software also keeps track of customers' premium points and, in Fina's case, can offer instant gratification by automatically controlling a voice-activated vending machine to provide a customer with a free soda.
Ed Kountz, an analyst at TowerGroup in Needham, Mass., said that except for Exxon Mobil Corp.'s SpeedPass, which uses a radio frequency key fob to authorize payment, the Cellerate trial is among the first large-scale trials of m-commerce in the gas station and convenience store market.
But, Kountz said, Alon and its Cellerate partners face a real problem in rolling out a service that requires a customer to punch multiple digits into his cellular phone and the gas pump, when he could instead just reach into his wallet for cash or a credit card.
M-commerce systems have to be "more rewarding than frustrating," although the loyalty program should help on the reward side, he said.