Mobile Payments - Parking

In this post, we will cover some basics of mobile payments in the parking tech space. We will use a recent Google Maps partnership announcement as our starting point.

In September 2020, Google announced a partnership with Passport Labs Inc. Passport Labs provides a mobile technology platform for the transport and parking industries. The partnership would let users pay for parking directly from Google Maps.

Passport Inc is a VC-backed startup that had raised $123.5 million as of December 2019. By July 2020, the company reported $1.9 billion in mobile payments and served 1,265 cities.

This partnership shows how important it is to have an industry-specific mobile payment solution. Google owns the Maps app and also has Google Pay, a digital wallet for making transactions. Yet Google chose to team up with Passport Labs Inc for a pilot program in Austin, Texas.

So let us look at the benefits each side gets from this partnership.

For Google: (a) Google Maps can boost user engagement and keep users coming back. (b) Google Pay usage goes up, since users may use it to pay for parking. (c) Google does not have to work with each individual player in the parking industry to build such a solution.

For Passport Labs Inc: (a) Partnering with a big-name brand like Google brings huge exposure and helps sign up more partners. (b) Passport Labs sees increased revenue, depending on how the transactions are structured.

Overall, it is a win-win for both teams.

There appear to be two main paths for digital parking in the industry today.

(a) Vendor-Specific Applications or OEM Versions of the Application. In this model, a vendor (let us call it "parking app") launches a mobile app or website. End users must download that app or visit the vendor's site to reserve and pay for parking. The vendor may also create a white-label version for a customer. For example, "parking app" might have a client called "my city" and launch a "my city app" for that specific area. In both cases, users need a separate app. The vendor handles the full end-to-end development of the payment solution.

(b) Native Application with an embedded parking payment solution. This is similar to the Google and Passport Labs partnership. Here, the user does not need to download another app. They can keep using the app they already know -- in this case, Google Maps. Google uses APIs from its payment partners to offer a new parking experience to its users.

Let us look at the various parts shown in the diagram above.

First, an "owner" signs up with a digital parking platform "vendor." The owner can be a city, university, municipality, or anyone who owns the parking meters. The platform vendor provides the tools to manage parking meters. It also gives the owner an interface to set prices, timing, and other business rules.

The vendor's goal is to sign up as many owners as possible. The vendor then reaches out to partners. Partners can be app providers or the owners themselves. The vendor provides APIs or a complete app for the partners or owners to use.

Finally, the end user uses the platform to make parking reservations and payments.