The proliferation of microprocessors, wireless communications, and the Internet will change the way we use various payment devices. Case in point: Mobil Oil has begun a nationwide roll-out of a wireless payment device called Speedpass. The free device has been in testing at 50 St. Louis-area stations since last August. Mobil expects to issue one million Speedpass’s in 1997. More than 14,000 have been issued so far. The technology was developed for Mobil by Texas Instruments and Dresser Industries.

For Mobil, this is the second major payment innovation in the past six months. Mobil launched the first full-scale bill presentment program on its Web in December. Mobil was also first to provide card payment capabilities at the pump in 1986.

Users order a Speedpass online at www.mobil.com/speedpass/h_home.html.

SpeedPass uses technology primarily deployed today on toll roads and toll bridges referred to as Electronic Toll Collection (ETS). The Mobil version allows users to automatically pay for their gasoline purchase simply by waiving the transponder “key tag” in front of the pump (recommended 1-2 inches away). An antenna on the pump sends a low-frequency radio signal to the key tag to determine the user’s ID number. The transaction is authorized against a Mobil credit file and the pump automatically turns on. After filling the tank, the purchase is automatically charged to a the MasterCard, Visa, or Mobil credit card account designated on the users enrollment form.

Mobil is also looking at locating transponders in tags affixed to the car’s rear window so the pump would automatically turn on as soon as the driver pulled up. The devices could also be used to personalize service station visits with user-specific messages such as a reminder that their car is due for an oil change.

Simply being able to purchase gas at Mobil stations with a key tag won’t change your life. But consider the implications if an industry standard and secure RF transponder was issued to credit card customers. It could be used anywhere that transaction speed is of paramount importance or where there is no clerk available to swipe a plastic card, such as parking garages, taxis, telephones, ATMs, vending machines, mass transit, fast food restaurants, etc. Users could swipe the device as they entered a queue and already be authorized for purchase when they got to the front of the line. The technology also offers the benefit of allowing users to charge a purchase without revealing their card number at the point-of-purchase. Transponders could also be used to control physical access to banking locations by automatically unlocking the door to a branch or bank of ATMs.

Wireless payment is just one of many innovations coming to the payments industry. Widespread use of electronic bill presentment, automatic payment services, digital cash, smart cards, and whatever else comes along, will provide new opportunities for financial institutions to add value to their online offerings. Financial institutions, building on 100 years of consumer trust, are in a great position to be the retailer of choice for new payment services. And the Web will be the logical point of contact for disseminating information, signing on new users, and tracking usage.

Contacts: David McGettigan is Mobil Speedpass Project Manager, www.mobil.com. Bill Wallis is President of Arch Energy/Wallis, owner of the St. Louis stations that piloted the service www.wallisco.com/new.htm. For more information on Electronic Toll Collection (ETC) refer to pelican.its.berkeley.edu/ PATH/DSS/etc.html, sponsored by the California Partners for Advanced Transit and Highways (PATH), a joint venture among the University of California, California Dept. of Transportation, and private industry.