Cities are turning to PXT Payments' smart debit card program not only for its intended use with parking payments, but also to attract money to their local economies.

Consumers can apply for the card online, but they cannot reload it online. To get funds onto the card, consumers must go to a participating merchant location near the area where the card can also be used for parking.

"The point of the card is to help increase foot traffic in downtown areas," said John Regan, PXT's chief executive.

PXT charges merchants a $200 one-time membership fee. Merchants then make commissions on card sales and reloads and pay 2% of the sale when consumers use their cards to initiate purchases.

The fee is not much different from the typical 2.5% discount rate merchants pay their banks to accept cards backed by Visa Inc. and MasterCard Worldwide, but merchants get involved with the program because the "prepaid, stored-value network is local," Regan said.

PXT offers merchants two options to accept smart debit card payments — one that attaches to computer-based point of sale systems, and one that does not. PXT provides all readers for free and settles all transactions through the automated clearing house system.

PXT introduced its system for municipal parking payments in 2006, and last week Brookline, Mass., became the sixth municipality to use it. The reloadable card enables residents to pay for parking in designated areas and to secure discounts from participating retailers and restaurants. The program went live Oct. 7.

Brookline expects consumers to purchase 5,000 cards over the next three years, said Marge Anster, the city's commercial areas coordinator. Residents may buy the card online or at participating merchant locations for $2. Shoppers who buy their cards online must pay an additional dollar for shipping. Twenty-five merchants participate in the Brookline program. Each merchant is responsible for determining discounts but must partake in citywide promotions. Consumers who initially load $50 will receive an extra $5 until Nov. 7.

Regan said it's too soon to say how much money PXT's system would draw to Brookline's economy, though he was able to say how much money flows through PXT cards used in cities in California, Connecticut and Florida. "We can currently get $5 million in local currency circulating around a particular market, especially if it's properly tied in to the parking infrastructure," he said.

Brookline expects similar success based on early feedback from merchants, Anster said. The Boston suburb was seeking to replace a similar parking system when its operator went out of business. The system was inconvenient because cardholders only could reload cards at the town hall. The harsh New England winter also punished the parking meters.

"The cards were popular despite the troubles," Anster said.

Brookline solicited a bid from PXT, and merchants already expressed interest in the system before learning any details, Anster said. "From the retailer's point of view, it's an additional reason to come into the place of business."

The cards might get added value if the nearby town of Newton also adopts PXT's system. Regan has had preliminary discussions with Newton town officials.

Portland, Maine, plans to adopt the system pending city budget approval, Regan said.

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