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. A few areas have gas stations that use electronic tolling transponders as a method of payment, such as Via Verde in Portugal.
The system was built at Mobil Oil Co by a team led by Late Mr William Fessler, his wife Nancy Fessler and the concept was provided to them by Paul Luthra in 1978.
The system was introduced in 1982 in Europe, and was first used in the United States by Mobil in 1986. 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 U.S. 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.
Pay at the pump 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 parts of Oregon. Oregon allows for commercial self serve of gasoline for business use  through a cardlock network such as Pacific Pride or CFN cardlock networks.
Some filling stations are totally unattended and only allow customers to purchase fuel by paying at the pump.
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 potentially 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.
These risks are balanced against the risk of fraud by employees copying credit card numbers or retaining receipts.
Cost to consumers
The vast majority of gas pumps with pay-at-the-pump capabilities will place a temporary hold on a certain amount of money, generally $75-$150, in a customer’s account following the use of a debit or credit card to make a purchase. The pump must do this pre-authorization before allowing a customer to pump fuel to guarantee funds are available to pay for said fuel. The length of time the funds are placed on hold, and are unavailable to the customer, is totally dependent on how fast the customer’s bank processes the transaction. Depending on the bank, it can take a few minutes to a few business days before the funds on hold are released.
While this amount is placed on hold, the customer could be penalized for non-sufficient funds when making other purchases on the same account.
To avoid pre-authorizations and holds placed on their accounts, customers can pay for fuel inside the gas station and not use pay-at-the-pump services.
Cost to businesses and 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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Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.