The Evolution of Public Parking Payments

Parking payment solutions have evolved significantly since their inception. The first parking meters were installed in Oklahoma City in 1935 (the invention of Carl C Magee) and cost a nickel an hour to park. The UK followed more than 20 years later with Mayfair in London, which charged one sixpence per hour.

An entire industry sprung up around this model in the years that followed. As towns and cities grew, parking payments became necessary to generate revenue for city infrastructure and avoid overcrowding. In addition, many independent landowners and companies profited from opening private lots on their land. Eventually, various mechanical (and subsequently electronic) payment options arose, and visitors could pay by coin for both on- and off-street car parks.

Unfortunately, as consumers moved away from physical currency in favor of digital payments, parking companies and municipalities had to find a new way to gather parking fees. This began with online authorized card payments and evolved to include mobile payment solutions and other card-not-present options.

Adopting Digital Payments: The Parking Industry’s Leap Forward

Parking operators didn’t take long to realize that consumers don’t want to scramble to find coins whenever they want to park. A significant change to the parking payments model came in 2000 thanks to an innovation by NMI (then Creditcall). Our teams developed the first online authorized card payment system for on-street parking meters. This was one of the earliest examples of an Internet of Things (IoT) connected device (a physical device connected to the internet).

Our solution used a GSM modem to securely carry card authorisation messages via a server to a user’s bank. Having these payments be “online authorized” meant that the payer’s bank would check every card transaction before issuing a ticket. This made it easier to decline over-limit or reported stolen cards, reducing fraud to virtually zero.

While never delighted at paying parking fees, drivers appreciated not having to search for coins whenever they parked. Because of this, these new “coin and card” machines became a huge success and were widely installed across the U.S. and U.K.

The next significant development came with the ability to use a mobile phone to pay for parking. Ringo and PaybyPhone were the first companies to introduce this technology, with early implementations allowing users to pre-register a credit card and then pay via SMS.

Recently, smartphone parking apps have become a preferred way to pay for many drivers. Some app providers even leverage inbuilt GPS capabilities to help users find nearby car parks, reserve spaces or even locate free public parking within a city in real-time. Because they are so quick and easy to use, the number of parking apps has exploded. Currently, over 50 developers in the U.S. offer parking-related apps with ever more features, each promising irresistible convenience.

The Future of Public Parking Solutions

How close are we to smartphones replacing parking equipment altogether? The answer is “it depends.” For commuters or drivers using certain parking facilities regularly, the ability to pre-book, pre-pay and be automatically admitted to a car park is a real time-saver and an excellent use of modern technology.

For non-registered users or visitors from out of town, it’s rather different.

Most inner-city off-street car parks and garages have physical barriers that allow cars to enter and exit the facility. These barriers are controlled by pay stations with built-in license plate recognition and multiple means of payment acceptance.

Technically it is possible to allow drivers to navigate to a website and pre-register to enter the car park. In this situation, drivers would pay online before the barrier lifts to let them out. Unfortunately, this solution comes with its own set of challenges. For instance, you can’t have a driver in a car park with a phone but no network or an empty battery - they would be unable to pay and exit the garage. Because of this, for the time being, pre-booking, online payment and automatic entry and exit must co-exist with physical pay stations and ticket printers.

In addition to mobile payments, connected cars and autonomous vehicles have become topics of debate. Can self-driving vehicles find parking, pay and park for you? Unfortunately, these options also come with their share of problems - especially in the U.K. Many of the car parks in the U.K. are tight, with corkscrew ramps to ascend floors and spaces only a few inches wider than the current crop of SUVs. This makes it difficult for self-driving cars to park unaided without significant damage.

However, the idea of a car being a method of payment is worthy of discussion. If adequately secured, it would be possible to add a payment method to a vehicle's digital wallet. This would work in the same way that Google Pay and Apple Pay host digital cards that stand in for actual credit cards. In this case, the car itself would pay for parking. In a few years, your car might automatically pay toll fees, buy you a coffee at a drive-thru Starbucks or purchase a meal at McDonald's.

How Technology Enables Modern Parking Payments

Parking operators need a payment gateway partner that allows drivers to pay how they want, be that by card, mobile, in-app or online.

NMI has been one of the parking industry’s most respected payment providers since 2002 and is used by city authorities, hospitals, shopping centers and leading private parking operators across the U.S. and U.K. It’s a single platform that supports parking machines, mobile acceptance, online pre-booking, enforcement and EV charging.

With NMI’s innovative payment gateway, you gain access to:

• One platform with multiple payment options
• Ultra-high reliability and PCI-certified security
• Integrations with all leading manufacturers
• Support for all major US processors
• Wide range of supported payment devices
• Secure authorization and tokenization platform that supports self-service pay stations, mobile acceptance and online pre-booking
• Pay Stations, ticketless, QR codes, mobile apps and EV charging

Providing payment flexibility while remaining compliant with the latest payment directives is increasingly difficult and complex. NMI technology powers innovation, opens the door to new opportunities and provides secure technology to help businesses succeed.

Contact one of our payments specialists today to learn how NMI can propel your parking operation into the future.