When PXT Payments first introduced a smart debit card program for municipal parking payments in 2006, little did it know then the system also would become a way for municipalities to keep currency flowing throughout the local economy.
Last week, Brookline, Mass., became the sixth city to use PXT’s system. 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 during the next three years, according to Marge Anster, the city’s commercial areas coordinator. Residents may purchase the card online or at participating merchant locations for $2. A $1 shipping charge applies for online orders.
Consumers do not need to provide any personal information other than a delivery address to purchase the card online. Consumers may reload cards only at merchant locations under a policy that was created on purpose, says PXT CEO John Regan. “The point of the card is to help increase foot traffic in downtown areas,” he adds.
Some 25 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.
PXT charges merchant a $200 one-time membership fee. Merchants then make commissions on card sales and reloads, and they 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 says.
PXT offers merchants two options to accept smart debit card payments. One involves a software-based system that merchants download to a computer-based point-of-sale system. Merchants use an Omnikey chip card reader that attaches to the computer via a universal serial bus port. Merchants lacking a computer-based POS system may use a VeriFone chip reader.
PXT provides all readers for free and settles all transactions through the ACH system.
It is too soon to put a dollar amount on the impact the system will have on Brookline’s local economy, Regan says. “If you take $20 as an average transaction, we have markets that are doing 25,000 to 35,000 transactions per month,” he adds.
Cities in California, Connecticut and Florida also use PXT’s system. “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,” Regan says.
Brookline anticipates similar success based on early feedback from merchants, Anster says.
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 wreaked havoc on the parking meters.
“The cards were popular despite the troubles,” Anster says.
Brookline solicited a bid from PXT, and merchants already were behind the system before learning any details, Anster says. “From the retailers point of view, it’s an additional reason to come into the place of business,” she adds.
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, is planning to adopt the system pending city budget approval, Regan says.
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