Pay at the pump
Pay at the pump is a system used at some filling stations where customers can pay for their fuel by inserting a credit or debit card or fuel card into a slot on the pump, bypassing the requirement to make the transaction with the station attendant or to walk away from one's vehicle.
The system was introduced in 1982 in Europe, and was first used in the USA by Mobil in 1986. Paul Luthra, who had graduated at the top of his class at National Institute of Technology, Kashmir with subsequent graduate degrees from XLRI- Xavier School of Management and the William E. Simon Graduate School of Business Administration, was working for Ponderosa Steakhouse and Bonanza Steakhouse in Dayton, Ohio as a Senior Systems Analyst. On a rainy day in 1978, his manager and mentor Bill Fessler (a graduate of Miami University) stopped at a gas station. Paul watched Bill from the car and noticed the two trips to the cashier hut. At that moment, with the mind-set of a time and motion engineer, Paul saw that an application of ATM technology at the pumps would make it convenient and quicker to buy gas. Banks had recently adopted the ATM technology. He shared his thoughts with Bill. Subsequently Bill Fessler changed jobs and joined Mobil, got funded to the tune of $3 million for research and development and got the system implemented. The system allows customers the convenience of not having to walk far from their vehicle, wait in line, or wait for the human station attendant to process the transaction. It also provides the attendants the advantage of being able to tend to other duties rather than being busy with customers. Only 13 percent of convenience stores had the technology by 1994, but 80 percent of U.S. convenience stores used the technology by 2002, and virtually all stores do today. In 2004, Sheetz was the first to use touch-screen kiosks by the pump where customers can also order in-store foodservice items that they pick up after fueling. In 2012 Zarco USA was the first to have ordering touch screens on the pump.
It is seen as a way to keep the cost of gasoline down by reducing the need for employees at filling stations. It is considered to be a major change from the days in which full service was the norm at filling stations, and the attendant not only pumped fuel, but also washed the windshield, and checked the fluids and tire pressure, all while the customer remained in the vehicle (full service is legally mandated in the U.S. states of New Jersey and Oregon).
Those who use the pay at the pump feature could be putting themselves at risk for fraud, as thieves attach skimmers to the pumps that can steal the information off the cards used to make purchases. Many debit cards can be used to make the purchase either as debit or credit. But those who make the purchases as debit are feeding their information into the skimmers.
Without the human interaction, there is no verification system when credit cards are used to make purchases, and no signature is required. This enables those in possession of stolen or cloned credit cards, or those who are otherwise making unauthorized use of another's card to purchase gasoline without a signature. Many stations now require customers making credit-based transactions to enter their zip code (United States) or equivalent (other countries) in order to be allowed to make a fuel purchase.
The receipts issued by the pumps, if not taken by the customer, often bear the number of the credit card used to make the purchase. If found later by a thief, this could be used to commit fraud against the customer. Laws in some places prohibit the full credit card number from being displayed on the receipt.
Cost to consumers
Some stations will place a temporary block on a certain amount of money in a customer's account following the use of a debit card to make a non-PIN-based purchase, since it takes about three business days to have the accurate amount debited. This could be as little as $1 or as much as $128. While this amount is placed on hold, the customer could be penalized for non-sufficient funds when making other purchases on the same account. Stations are guaranteed to receive up to this $75 on fuel purchases, even if the purchase was made fraudulently and the card-holder is not held liable.
As gas prices have risen during the 2000s, many fill-ups are costing customers more than $75, the maximum amount that can be authorized from a single swipe. Credit card companies have considered raising this limit to accommodate larger purchases.
Cost to employees
The pay at the pump feature has led fewer customers to enter the area of filling stations that sell other items typically sold at convenience stores, thereby hurting the profits stations make from such sales. This is seen as an advantage to the customer not just for saving money, but also by reducing clutter and mess in the vehicle.
The feature is also criticized for causing the loss of some jobs. While stations continue to have an attendant on duty, the customers are performing many of the former tasks of the attendant, thereby leading to less availability of employment.
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