Partnerships are shaping the future of the FCI market
It’s nothing new that Fuel Card providers are facing the same issues and digital disruption as many other industries since COVID-19 pushed the deadline to go digital up two-fold. To stay competitive, FCI’s need to switch from a card-centric model to customer-centric and modernize their IT approach. Many FCI’s don’t have these resources in-house though to expanding their offering or digitally transform. Choosing an expert in another industry would increase revenue, differentiate their business model and eliminate strain on the business model when the change is unrelated to their core competency. Here are six reasons partnerships are key to success.
- New Touchless Requirements
The Covid-19 pandemic became a push to develop the contactless payment methods to diminish contacts. As one of the options, Shell and ExxonMobil launched their mobile apps to pay for fuel without leaving the vehicle.
- Increased Fraud
Currently, fuel cards are not strongly protected against external hackers or an internal fraud. Misuse, slippage, overfilling, skimming and breach of information are all security issues that can lead to big financial loss. Unfortunately, 65% of fleet managers in the UK see fuel fraud as a major issue for their companies and it can be a serious block for fuel card use. Fuel card issuers need to provide fleets with tools to prevent fraud, like transaction limits and real-time tracking via telematics.
- Fuel Payment Preferences
More and more customers prefer to use cashless methods to complete purchases. Not only is safer but it also provides better budget control. This fact is also relevant for the transportation industry, especially as to stay competitive they need to optimize fleet management. As users become more “tech savvy”, they will ask for more functionalities to have deeper understanding and clear overview of their spending. As an example, EPF and Wex are working on reporting and real-time updates on spending and business-related expenses to streamline the fuel payments.
- Green vehicle initiatives
The government is growing increasingly supportive of green initiatives across Europe, expanding the interest and pressure to move towards electric or hybrid and natural gas commercial vehicles. The forecasted growth of global electric and hybrid bus sales went from 9,000 vehicles in 2016 to 52,000 in 2025. As a result, directly impacting many fuel cards companies. Fuel card providers will need to think outside the box, even consider offering an option of payment for recharging.
- Legal framework Changes
Recently, the European Union introduced Payment Services Directive (PSD 2) or Directive (EU) 2015/2366) for regulation and compliance of payment service providers, particularly around cross-border payments. The goal of the directive is to make payments safer and more convenient for customers. To comply with the new requirements, several fuel cards providers need to adjust their business models.
- Increased Fuel Card Provider Competition
The range of services across fuel card providers is similar, their main differentiator typically involving the breadth of their acceptance network. Limited networks require many fleets to have cards from multiple providers to cover their routes. It will be critical for businesses in the FCI market to keep customers, build loyalty and stand out amongst the pack. Fuel Card companies should consider looking for additional services to streamline their customers’ processes including secure parking, VAT reclaim, tolls etc.
To expand a general service offering and provide customers their preferred services, fuel cards issuers should collaborate with other industry experts. MSTS Tolls provides an opportunity for partners to offer a complete tolls and fuel solution including an advanced tolls management portal with extended reporting options and 24/7 self-service capabilities.
For more information check out our FCI partner page.