In the heart of the Kanata technology park, a small company focused on networking gear for gas stations has been quietly working on a new project – a chip-card reader retrofit for self-serve gas pumps, but one that does much more than just take payments.
Deepak Wanner founded Precidia Technologies in 1999, focusing on application-specific integrated circuits, or ASICs, for Internet of Things technology. During the tech bust, the company pivoted toward networking gear. As North American payment technology gravitated to chip cards, Precidia was purchased in 2015 by U.S. firm Merchant Link, which was keen to acquire the firm’s payment software and devices.
What was left became iPocket232, named for the networking gear sold primarily to gas stations in the U.S. and Canada. IPocket232 continued on a steady path and its development team members recently began working on a new venture called WannLynx, focused on chip payment retrofits for U.S. gas stations.
Meanwhile, Wanner has been working for Merchant Link for three years since the acquisition of Precidia. This October, he plans to rejoin iPocket232 as it prepares to launch WannLynx.
The company’s history with payment systems, combined with its knowledge of the petroleum and gas station industry, has provided it with insight into a largely untapped market, according to Wanner.
The deadline for installing chip-card readers at U.S. self-serve fuel pumps has been extended to Oct.1, 2020, a date imposed by bank and credit card companies. Since there’s no incentive for gas station owners to retrofit their pumps other than to comply with regulations, Wanner says around 150,000 gas stations across the U.S. have yet to make the switch.
“It’s a ripe market for conversion,” he says.
“You’ve got to give them some value at the pump.”
That value comes in the form of an interactive screen that works in tandem with the chip reader to offer tailored advertising, from both outside companies and the gas station itself.
WannLynx, or its product FuelLynx, can use demographic data from the card to target advertising, and can also notify the customer of in-store deals or coupons; with the rise in self-serve pumps, gas station owners are constantly looking for ways to get customers inside their store.
Unlike iPocket232’s networking products, which are hardware-based, most of FuelLynx’s capabilities are housed in the cloud, which will customize content on the screen. It’s not just advertising – there’s also an opportunity to offer surveys or other interactive options.
Between advertising revenue and higher in-store profits, Wanner says the FuelLynx upgrade offers gas station owners a way to subsidize the cost of a retrofit. WannLynx is also looking at including alternate payment methods to reduce the credit card fees business owners pay, such as Venmo or Walmart Pay.
Wanner says iPocket’s team recognized a need and opportunity for innovation in the gas industry.
“We would like to do something different,” he says.
Pat Wudwud, manager for iPocket232 and WannLynx, says when the company began focusing on networking gear, they “always knew” iPocket232 would be a launchpad for another venture.
Now, with the deadline for chip-reader conversion on the horizon, the company has been focused on developing and testing the three technological aspects of WannLynx: secure payments, advertising potential and data analytics.
WannLynx is looking for investors, and is planning to ramp up hiring in both Canada and the U.S. There are currently a handful of employees in the Kanata R&D office, but Wanner wants to see the location grow to 20-30 developers, with more sales staff in the U.S., since that’s where the company’s primary market is.
However, moving iPocket232’s or WannLynx’s R&D elsewhere has never been an option. Wanner says a diverse talent pool combined with an innovation-friendly government have made Kanata the right environment to develop in.
“This city … is an amazing technology warehouse,” says Wanner.
As for the local market, Canadian gas stations were retrofitted with chip readers around five years ago, says Wanner. Most gas station networking technology is used for around a decade before it’s upgraded, so within five years he hopes to see the Canadian market open up.
Wanner acknowledges that the idea of targeted advertising is not one many consumers find appealing. However, he says that with the declining reach of traditional advertising and the rise in targeted advertising on social media platforms, companies are looking for new dedicated audiences – and those two or three minutes at the pump may be the next place to find it.
“We just want to be at the right place at the right time,” he says.