Fotocredit:, maho, 44286840
28. July 2017

PayPal – a nose ahead at the petrol pump

An Internet payment service poaching in extrinsic preserves

With Shell’s new app, you can now pay for your petrol directly at the petrol pump. Super convenient for drivers, but not for other financial institutions. Why has no other bank come up with this idea?

Staying seated is the good news

Drivers in a hurry have good reason to steer towards Shell’s petrol stations to fill up their tanks. Together with PayPal, Shell is offering SmartPay, a service where the payment process can be handled quickly and easily at selected petrol stations in Hamburg and Berlin, after you have linked the Shell app to your PayPal account. When you are standing in front of the petrol pump you identify yourself with a fingerprint or PIN and are subsequently prompted to press “refuel”, then enter the petrol pump number and the maximum amount you want to fill up. GPS serves to identify at which Shell station the vehicle is located.

When the tank has been filled up and the pump nozzle re-attached, the app confirms the respective amount. A fuel receipt that is accepted by the tax office is then sent to you by email. And on you go …

SmartPay is not just for people with tight time schedules. Some parents are reluctant to leave their children alone in the car to go to the checkout, and for some others the way there is just too strenuous. In future, you will appreciate being able to stay in the car, especially at those Shell stations, where a friendly staff member can take over the refueling.

Every innovation has its downside

Although SmartPay will be welcomed by many customers, the service will not appeal to everyone. Many petrol station leaseholders are still skeptical about whether something is being foisted on them. As a good part of their profit is made in the petrol station shop with the sale of cigarettes, newspapers and food, those who don’t have to leave their cars are lost customers. But perhaps the service might attract even more refuelers, so that a sales plus is achieved with the extra fuel sold.

PayPal’s initiative will probably also not appeal to traditional banks who are at least indirectly affected when people pay for their petrol with Shell’s practical app. PayPal, an Internet payment service is now also starting to earn money in “real life”. Faster than any other bank or creative FinTech, Paypal has launched an attractive service which not only makes a profit with the transactions, but with which data can also be collected. Already underway in the UK, and even if it has taken almost two years for the service to be launched in Germany, PayPal shows how new business models and business segments can be opened up in places that were previously secure strongholds of cash, EC or credit card payment.

SmartPay shows exemplarily the advantages and disadvantages of digitizing payment systems. Securing the benefits of this future potential is a matter of creativity, something banks increasingly need, to pit themselves against new competitors from the Internet and acquire new customer segments.

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