NMI: 5 Reasons Cities Should Invest in Modern Parking Payments

New York City makes over $200 million in parking revenue each year, while Toronto brings in $142 million Canadian dollars. Municipal parking is big business, especially in cities with dense downtown areas and lots of cars on the road. Cities depend on that revenue to fund services, build and repair infrastructure and improve their residents’ lives. Anything that makes parking better, more lucrative and cheaper to operate stands to benefit everyone — municipal governments, local businesses, residents and everyone in-between.

One key way cities around the world are improving parking is by modernizing their payments infrastructure.

Outdated meters, especially those operating solely by cash, are inefficient, expensive and easy to abuse. In contrast, modern systems like pay-and-display, pay-by-plate meters and mobile app–based solutions are providing cities with a variety of benefits, including:

• Reduced congestion on roads
• Better data and decision-making
• Optimized revenue
• Lower operating costs

But how are these technologies impacting parking, and why are modern cities making them a top priority? Below, we explore five reasons why cities should invest in modern parking payment infrastructure, including minimizing congestion and generating revenue for local governments.

1) Modernized Parking Payment and Management Systems Reduce Congestion

Cars searching for parking — known as “cruising” — are an enormous contributor to city traffic and pollution. While it’s difficult to pinpoint exact numbers, two studies performed in New York City in 2006 and 2007 found that between 28% and 45% of cars on the road were searching for parking. Getting those cars into spots quicker would reduce congestion and improve air quality, especially in busy downtown areas.

One of the best ways to accomplish this is by implementing demand-based pricing, which dynamically changes meter and garage rates to encourage drivers to park in underutilized areas of town to free up spaces in highly congested ones. San Francisco implemented a demand-responsive pricing system called SFpark, and in addition to lowering cruising times, it resulted in:

• Increased revenues for local businesses and increased sales taxes for the city
• Lower overall parking rates for drivers
• Fewer miles traveled by vehicles

Demand-responsive pricing is only possible with modernized systems, and it is one of the top reasons cities should look into updating their parking payments.

2) Smart Cities Need Better Parking Data for Optimization

Smart Cities are municipalities that use data to optimize services, ranging from transportation, hospitals, libraries, water supplies and more. From Singapore to New York, cities around the world are looking to put data at the heart of their operations. Parking and traffic flow are major points of potential optimization since Smart Cities can use this data to adapt and optimize everything from how spots are priced to how availability is monitored and communicated to users through apps or other digital means.

Parking payments are also a major source of data that can feed into Smart City databases — if cities can find a way to collect it. Modern digital payment systems are ideal for collecting the usage and pricing data that Smart Cities need to improve services and reduce congestion. That makes investing in modernized parking payments an investment in the city’s future, with potentially widespread benefits that go beyond just drivers and traffic flow.

3) Modernized Parking Payments Optimize Revenue

Modern parking payment systems — particularly app-based ones — offer major revenue advantages to big cities. First, they streamline the user experience, which makes finding and paying for parking easier. For example, Toronto’s Green P app enables drivers to use a “Quick Park” feature to pay for parking in previously used spots in just two clicks. Unsurprisingly, utilization is way up. That adoption means easier and more frequent compliance with paid parking, as evidenced by the 29% reduction in ticket issuance the city enjoyed after adopting the app. Increased compliance leads directly to recaptured revenue.

Modern digital payment solutions can also make enforcement easier when combined with other new technologies, like vehicle detection systems that can detect when a spot is full and compare it to the digital payment record in real time. That ensures cities aren’t losing revenue to illegally occupied spots, which also helps boost compliance since paying the metered rate is cheaper than a guaranteed ticket.

4) Modernized Parking Systems Are Cheaper To Operate and Maintain

Modern contactless and app-based parking payment systems can significantly reduce the costs associated with collection, enforcement and maintenance. As we’ve already seen, modern systems increase compliance and reduce the need for manual patrol and enforcement. Digital systems also eliminate the need for manual collection of coins — a time-consuming and inefficient process. But, maybe the most impactful way modern parking technology can reduce costs is by minimizing the number of meters that need to be purchased, installed and maintained.

App-based systems like PayByPhone, ParkNYC, SFpark and Green P move the transaction from a meter to the driver’s phone. By moving more spaces onto app-based systems, municipalities can reduce the number of physical meters needed to cover any given lot or street. Reducing or eliminating that hardware saves costs upfront, and it lets salaried municipal workers spend less time servicing meters to keep revenue flowing.

5) Future-Proofing Is Key to Ensuring Success

One thing transportation has in common with the payments industry is that it’s currently undergoing a major technological shift. From accelerating EV adoption, to the popularity of ride-sharing as an alternative to public transportation and cabs, to autonomous vehicles just on the horizon, cities need to be ready to adapt to a changing landscape, and that includes parking.

The latest on-street parking terminals are unquestionably the most future-proof and adaptable solutions for cities. For instance, a parking spot already using a digital meter or app-based payments can seamlessly integrate EV charging hardware in a way that old legacy parking systems simply can’t. With user behavior in both transportation and payments in flux, cities need to be ready to make these kinds of updates quickly to optimize revenue and traffic flow in the future.

Give Drivers a Better Way To Pay

Both municipalities and private parking operators stand to benefit from modernized payment solutions. NMI is the ideal partner to help bring legacy systems into the 21st century.

NMI’s unattended parking payment solutions support a range of certified hardware devices and gateway software that can be easily integrated into any modern parking terminal. Whether it’s ticket-based on-street or garage parking, pay-by-plate metering or a mobile app, NMI enables operators to give their customers the choice, flexibility and streamlined experience they demand.

About NMI 

NMI is a leading global payment enablement platform, processing more than $195 billion in payments annually. We enable payments for over 3,300 partners and over 267,000 merchants around the world and across the entire commerce ecosystem: online, in-app, mobile, in-store, unattended, and whatever’s next. We’re constantly innovating in order to power the next era of payments, building in the latest technology so ISVs, ISOs, banks, and fintech innovators can focus on what they do best. NMI has offices in the US and UK and serves global customers.