Pay-By-Text Takes Off For Murphy Oil USA

With just a soft sell, thousands have signed up for the chainwide payment option

Murphy Oil USA is breaking new ground with MurPay, a proprietary payment system that allows customers to pay for fuel and merchandise via text message.

Close to 10,000 Murphy Oil customers have signed up for MurPay, which is linked to a checking account and processes each purchase as an ACH transaction. Since its rollout at the end of April, MurPay has offered users gas prices guaranteed to be the lowest posted within the last 24 hours at the company's 1,120 Murphy USA branded locations.

The MurPay service has helped Murphy Oil cut credit card fees while positioning the chain as a cutting-edge retailer, said Charles Jarrett, senior director of retail IT (information technology).

"We wanted to show Murphy as an innovative company and reach out to customers with an appealing, simple method of payment," he explained. "There are a lot of vendors and merchants dabbling in [mobile payment] and we wanted to get out in front and try something ourselves. The fees associated with MurPay, in a more stable gasoline pricing environment, are much less than credit and debit [and] closest to a check transaction."

Customers sign up online for MurPay by providing a cell number and a valid checking account from which funds will be deducted. At the pump or in the store, they select "MurPay" from the payment options offered and text "MurPay" to "304050" to receive a MurPay code in return. (MurPay codes may also be accessed online at the company's website.)

The gas pump is activated when customers enter the MurPay code at the pump's touchscreen, and their customer verification number (analogous to a PIN), which they create when they sign up for MurPay. When the nozzle is returned, the point-of-sale (POS) recognizes the dollar amount spent and clears the transaction. It then goes up to the host system, just as a debit card transaction would, which matches the customer to the amount purchased. The transaction is cleared overnight, using Certegy.

MurPay, which works with any text-capable phone, is more secure than a credit card, Jarrett, said, noting that MurPay codes have a 24-hour lifespan and are no longer active once used. "Other mobile payment solutions call for specific handsets or big investments by the retailer in near-field communication," he added. "Our break-even is much quicker and rollout is much faster."

Users needing help can text "HELP" for standard help response; "HELP COMMANDS" for a list of MurPay text commands; "FREEZE" to stop an action on the account; and "STOP" to prevent promotional messages and other action-specific texts.

"We haven't gotten feedback negative or positive on the ease of use; customers are simply using it," Jarrett said, noting the chain is processing hundreds of MurPay transactions each day even though the service hasn't been heavily promoted yet. Aside from some gas pump signage touting the service, there has been little marketing support, though a campaign is in the works for later this fall.

Murphy USA also has been approached by a third-party card issuer that would like to use MurPay as part of a loyalty program. Customers who use the third-party payment card for purchases worth $1,000, for instance, would be rewarded with a $10 MurPay credit.

"We wanted to show Murphy as an innovative company and reach out to customers with an appealing, simple method of payment." — Charles Jarrett, Murphy Oil USA

The MurPay software was developed totally in house, and a patent is pending. Among the resources dedicated to the project were a dedicated program manager; the internal software development team, which created the proprietary POS interface at the pump and the POS register; and programmers, who developed the backend transaction authorization and clearing programs. Development took 16 months from when management gave Jarrett and his team the go-ahead.

"Our biggest challenge was having the unique skill set in-house to develop an end-to-end payment system," the IT executive noted. "We needed a diverse range of skills to understand what was required to accept payment, tender the payment and receive payment back from a financial institution. Normally, we'd leave that up to processors."

Murphy Oil locations use the company's proprietary POS software, which removed many integration hurdles. The internal team also developed the software to manipulate the pump prompts, which are driven through the point-of-sale.

MurPay was piloted in Tampa, Fla., for a month before launching chainwide. We really haven't had any major issues," Jarrett said. Still, over the summer, the IT team enhanced security to provide customers greater fraud protection, similar to PayPal's verification protocols.

To broaden MurPay's appeal, the gasoline marketer offers small business options that help entrepreneurs track fuel purchases, and family options so a user can set up sub-accounts for their driving-age children and college students. "MurPay will also send alerts to the parents' accounts when their children use it," Jarrett said.

While all MurPay transactions are limited to $125, users may set their own maximum purchase for a lesser amount, as well as daily and monthly maximum purchase amounts or limits on the number of transactions each day and each month. Customers may also restrict the type of products purchased with MurPay, selecting "pump only" or excluding tobacco, beer, wine, liquor and lottery tickets. Users can sign up for product-category specific promotional e-mails or text messages, too.

"Parents will find MurPay a compelling alternative to providing young drivers with credit and debit cards. With MurPay, customers can be assured all purchases are appropriate for their families," Jarrett said. "It's appealing to different generations for different reasons. We believe this technology gives us a competitive advantage in a highly competitive industry."