Dive Brief:

• Phillips 66, the energy company with about 7,500 gas stations in the U.S., is testing out a mobile transaction application in Texas and Oklahoma with plans for a nationwide rollout next year, Convenience Store News reported. The app is built on the PetroZone mobile commerce solution developed by P97 Networks, a tech startup in Houston.
• The mobile app will be accepted at Phillips 66, Conoco and 76 other gas stations and will include a station finder, mobile wallet supported by Chase Pay and digital offers based on location. 
• In addition, the app will house features like mobile debit payments by Synchrony Financial, Phillip 66’s KickBack Rewards loyalty program and in-vehicle payment demonstration for Honda Developer Studio that lets drivers buy gas from their car’s on-board infotainment system.

Dive Insight:

Phillips 66, like its competitors in the fuel retail segment, recognizes that gas stations need to quickly adapt to a changing marketplace that's increasingly incorporating mobile technology. BP is experimenting with a mobile payment app to make fill-ups faster and more convenient for drivers, The Wall Street Journal reported. The app lets users select a gas station, the kind of fuel and how much they need. The app then tells drivers which pump is ready for them so that they can quickly re-fuel and pay automatically.

Gas stations also face longer-term threats from electric cars, which are expected to reduce gasoline consumption in the U.S. by 5%, or as much as 20%, by 2035, according to a study by energy research and consulting firm Wood Mackenzie. Better vehicle fuel efficiency, ride-sharing and automated vehicles will also likely contribute to waning demand.

While mobile payments, in general, have not caught on as quickly as once expected, using mobile apps to manage loyalty programs was most popular among millennials, with 38% of the age group saying they use a wireless device to keep track of reward points. Mobile apps led to a 4% decline in using plastic membership cards for reward programs last year, according to a study by loyalty manager Excentus and Ipsos market research. Housing rewards programs and payments on a single app streamlines the purchasing process and makes for a more efficient consumer experience.