The fleet and fuel card industry is undergoing a digital transformation, driven by advances in technology and the participation of schemes such as Mastercard and Visa. These schemes are adopting fuel industry standards, such as those developed by Conexxus, which utilize the best of the retail fuel market technology and fleet and fuel card standards and specifications.
South Africa is a great example of a country where the fleet and fuel card industry has embraced digitalisation. The South African fleet and fuel card industry has made the country-wide decision to migrate all fleet and fuel cards to utilise scheme fleet programs and use Conexxus as the base standard for acceptance within its fuel and retail network. This has enabled all fleet and fuel card issuers to expand their value offerings beyond the purchase of traditional fleet-related items, into the retail network.
One key benefit of the digital transformation of fleet and fuel cards is the emergence of mobility solutions. Mobility solutions allow a single card to be used to purchase all items required for a fleet operation, including fuel, tolls, parking, vehicle licenses, fines, and even accommodation and meals. This provides convenience and security for drivers, as well as peace of mind for fleet managers.
Open loop fleet system means a card can be used to make payments at any merchant that accepts the card’s brand, such as Visa or MasterCard. This allows companies to use their card system to take payments from anywhere, such as for repairs on a vehicle, a stay at a hotel, or to pay a toll. The system can also be used to pay for a wide range of services, such as fuel, food, and merchandise.
Moving beyond a closed-loop ecosystem into mobility solutions
Many other markets are due to follow South Africa’s example, which means a sea change in the global fleet and fuel card industry is coming. Mobility solutions are hugely user-friendly and enable far greater flexibility for drivers and their employers. For example, a driver could collect a load at the company’s homebase depot, and refuel their truck using their chip and PIN fleet card, which is encoded with their vehicle details and driver identification number. The transaction would then be processed to the issuing system for approval, and the vehicle’s fuel identification unit or onboard unit would be linked to the card.
The driver could then travel to their first stop, passing through tollgates and paying with their contactless fleet card. At the stop, they could pay for parking and repair a broken oil duct, using their card for both transactions. They could then book into their chalet for a good night’s sleep, and purchase dinner, all with their contactless card, within the velocity limits set by their manager.
The next day, the driver could get back on the road, and if they were caught speeding, they could use their card to pay the on-the-spot fine. At their next stop, they could refuel at a participating fuel merchant, where they would receive a discounted price on diesel. Finally, when the driver reached their destination, they could deliver their load. If they need to, they could contact their manager to book a flight home using their card.
While this may seem like a lot of transactions to be allowed on one fleet card, each vehicle-related transaction can be validated with a vehicle registration number, driver identification number and PIN. Some transactions, such as accommodation and dinner, may only require PIN and driver identification, while others, such as flight tickets, may require PIN and CV2 with EMV 3-D Secure. Security remains a challenge, but current technology is already demonstrating its effectiveness in dealing with fraud.
The fleet manager also has the comfort of knowing that with all these security measures in place, and with no velocity limits exceeded, they can correctly account for all purchases and therefore have a more accurate understanding of the cost of ownership. In addition to the convenience and security that transport companies and their drivers receive, there are also benefits for the issuer of the card. The issuer can benefit from commercial arrangements with the schemes, and merchants can benefit from fraud protection and secure quick payment, reducing the risk of chargebacks. The issuer also receives additional non-interest revenue to cover risk and operational processing costs. The issuer also has the capability to manage transactions processed outside of the scheme network, such as at home base and participating fuel merchants, by using their card management platform to allow for different, more complex commercial arrangements with these merchants directly.
Overall, the digital transformation of fleet and fuel cards is providing significant benefits for all stakeholders, including transport companies, drivers, issuers, and merchants. By embracing digitalization, the fleet and fuel card industry is well-positioned for future growth and success.