By Leon Du Plessis, key account manager for MEA at The ai Corporation (ai)

Leon Du Plessis, key account manager for MEA at The ai Corporation (ai)

The fleet and fuel card industry has been undergoing a significant transformation, driven by technological advancements and changing consumer behaviours. As traditional magstripe technology becomes increasingly obsolete and vulnerable to fraud, providers must migrate towards EMV Chip card ecosystems and adopt modern payment technologies.

While these providers have made strides in developing unique pricing receipts, setting up bilateral acceptance agreements, and complex third-party integrations, high maintenance and support costs, with further innovation challenges, have hindered progress. The introduction of EMV fleet card programmes and adopting international standards such as Conexxus have facilitated the transition from closed-loop to open-loop ecosystems. However, fleet and fuel card providers still need help evolving their technology stacks or outsourcing critical functions such as card management, expense management, and customer record management. The return on investment for such endeavours can be uncertain, especially when existing investments are still being amortised.

Fintech companies have emerged as critical players in the fleet and fuel ecosystem, offering solutions to drive the industry towards mobility. Nevertheless, the intricate nature of the fleet ecosystem, coupled with growing regulatory and compliance burdens, makes it challenging for any single entity to address all the complexities.

Forecourts, too, are undergoing a significant transformation. The rise of digital payment methods such as Google Pay, Apple Pay, and Samsung Pay, as well as the increasing adoption of electric vehicles and their associated charging infrastructure, has forced forecourt merchants to adapt. While traditional fuel sales have been the mainstay of forecourt business, the shift towards EVs and alternative fuels necessitates significant infrastructure investments and a change in commercial models.

To remain competitive, forecourt merchants are expanding their offerings to include food, beverage, and retail services. By creating a more convenient and attractive environment for their customers, merchants can capitalise on the time their customers spend at the forecourt, particularly during EV charging. This transition requires significant changes, including adopting retail-like practices, enhancing advertising strategies, and focusing on customer foot traffic rather than fuel sales.

The convergence of fleet and forecourt

The convergence of these trends presents an opportunity for fleet and fuel card providers to expand their value proposition. By moving towards open-loop payments, they can enable their customers to utilise a single payment method for fuel, food, beverages, and other services at the forecourt. This can lead to increased convenience, improved driver satisfaction, and potential cost savings for fleet operators.

Why the shift to open-loop payments?

Whether small or large, fleet vehicles are driven by people who have the same basic needs as any other consumer; they require breaks, meals, and rest and often need to access additional services like showers and vehicle washing. By enabling drivers to use a single payment method for all these expenses, fleet operators can improve driver satisfaction, reduce fraud, and ensure that drivers are well-rested and focused on their tasks.

The future of fleet and fuel card services

As the industry continues to evolve, fleet and fuel card providers must embrace innovation and adapt to their customers’ changing needs. By leveraging technology and strategic partnerships, they can position themselves as key players in the future of mobility. A new technology stack that combines the best of traditional and modern payment systems can enhance customer value propositions and unlock new revenue streams, such as interchange fees on non-fuel purchases.

By embracing the shift towards open-loop payments and the changing landscape of forecourts, fleet and fuel card providers can create a more sustainable and profitable future for their businesses.

Leon Du Plessis is a key account manager for MEA at The ai Corporation (ai). ai is a leading provider of fraud prevention and payments solutions. Operating for over 20 years, ai has provided solutions around the world to some of the largest financial institutions, international merchants, and major payment service providers across a broad spectrum of industries.