Pilot project lets drivers buy gas with a smartphone and an E-ZPass

The PayByCar system lets drivers who have E-ZPass transponders to pay highway tolls also purchase gas without using cash or a credit card at the pump.Suzanne Kreiter/Globe staff/Globe staff

WESTBOROUGH — An overhead scanner identifies a car as it pulls into the gas station. Just as the driver hits the brakes, his phone buzzes with a question: “PayByCar today? Reply with pump number to activate.”

The driver presses “5,” and by the time he steps out of the car, his credit card has been authorized. The gas is ready to pump.

The futuristic new payment option at the Alltown Mobil station on Route 9 takes advantage of a device that millions of drivers already have in their vehicles: an E-ZPass toll transponder. On Monday, the Massachusetts company that secured permission last year to build a payment system using the government-run network took the first step in rolling out its product.

“You don’t have to worry about entering your pin or swiping your card or . . . about card skimming,” said Kevin Condon, chief executive of PayByCar.

Drivers sign up for PayByCar online, giving the company permission to use their transponders to identify their cars and bill their credit cards. (The accounts are separate from the ones drivers use to pay tolls.)

So far, the service is available only at the Alltown in Westborough, a location chosen for its proximity to the Massachusetts Turnpike and its legion of toll-paying commuters.

But Condon said he expects to roll out more shops soon. The Alltown station is one of about 1,600 in the region run by Waltham-based Global Partners, which said it is interested in expanding the availability of the payment program.

Condon said he’s also in talks with a major fast-food chain and a big-box retailer to add PayByCar to drive-through orders and curbside pickups — both transactions that turn on quickly assigning orders to specific vehicles.

The business is a significant departure from what Condon had in mind when he founded PayByCar’s parent company in 2011 as a government consulting firm searching for a mechanism to make gas taxes variable, based on the kind of vehicle being filled up.

At first, he figured E-ZPass would be a good way to sort cars by type, but then realized the same method could be used for payment. After a career in government and transportation consulting, Condon was able to convince E-ZPass, a compact that includes 17 states and 35 million transponders, to approve the project.

Now, the company has raised about $1 million in venture funding and is looking to raise more.

PayByCar will face stiff competition in coming years, as mobile payments become more common — especially through phones, other mobile devices, and components built into new cars. But Condon said the E-ZPass integration gives the company a running start as competitors work on developing in-car payment options and helping customers become comfortable using them.

The company may eventually design a system to identify cars without the help of E-ZPass, potentially by using its own transponders or devices that customers already have. But Condon said this was the quickest way to reach millions of potential customers who are already using their transponders to pay tolls, he said.

“You already have a transponder. This is really easy to do,” Condon said. “We’re not toll guys. We’re using the transponder because there’s an installed base, and consumers get it.”