Pay-by-Text Taking Off for Murphy Oil USA

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

Linked to a customer's checking account and processed as an ACH transaction, MurPay purchases have helped Murphy Oil cut credit card fees, while positioning the chain as a cutting-edge retailer. 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 1,115 Murphy USA branded locations.

"We wanted to show Murphy as an innovative company and reach out to customers with an appealing, simple method of payment," said Charles Jarrett, senior director of retail IT. "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, closest to a check transaction."

Customers sign up online for MurPay by providing a cell phone 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, text "MurPay" to "304050" and 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 their 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 recognizes the dollar amount spent and clears the transaction. The transaction 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phone, is more secure than a credit card, Jarrett, noted, since MurPay codes have a 24-hour lifespan and are no longer active once used.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. Our break-even is much quicker and roll out is much faster," he explained.

Users needing assistance can text "HELP" for a 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, although the service hasn't been heavily promoted yet. "We have had a surprising amount of adoption at this point with no marketing support at all and low-key training of associates."

MurPay will be promoted more aggressively this summer and early fall to include some cross-channel and merchant partner programs.

The MurPay software was developed totally in house; 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 the time Jarrett and his team got the go-ahead from management. "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."

MurPay was piloted in Tampa, Fla., for a month. "We really haven't had any major issues," Jarrett said.

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 POS.

To broaden MurPay's appeal, the gasoline marketer offers family MurPay options, so that a user can set up sub-accounts for their children who are of driving age and college students. "MurPay will also send alerts to the parents' accounts when their children use it," Jarrett noted.

Small business options help entrepreneurs track fuel purchases, which are made at the cheapest price for the proceeding 24 hours.

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 and limits on 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 and text messages, too.

"Parents will find MurPay a compelling alternative to providing young drivers with credit and debits cards," Jarrett said. "With MurPay, customers can be assured all purchases are appropriate for their families."

Already, MurPay has been used by customers in every state the company operates in, according to Jarrett. "We're pretty excited about it. It's appealing to different generations for different reasons," he said. "We believe this technology gives us a competitive advantage in a highly competitive industry."