With inflation at four-decade highs and consistently rising fuel costs, there is sufficient evidence that consumer sentiment may sour. Rising fuel costs may cross a threshold that may lead to destruction in demand for fuel. It does not help anyone when individuals and businesses start cutting back activity because energy costs are so prohibitive.
Businesses have a significant cost advantage from using a fuel card since companies can not only save on fuel but they can often earn rebates on gas they buy. Loyalty bonuses and discount on services are other benefits that are available from some fleet cards. It is a great reason to accept fleet cards so that you may attract a whole new set of cost-conscious customers in today’s environment.
However, not all fleet card types are alike. It helps to understand some of the nuances of the different cards available in the market. It also helps to understand your customers, so specific matters important to users of these fleet cards can really help inform your decisions. Below we will discuss what is a fleet card, the benefits and drawbacks of accepting them, and what is involved in accepting fleet cards.
What are Fleet Cards?
Fleet cards, aka fuel cards, are basically a charge card whose primary purpose is to purchase gas. Fleet cards are mainly used for gas purchases, but they offer additional benefits. Some may provide limited emergency repair services, tire changes, and other forms of vehicle maintenance.
Fleet cards also allow businesses to control how drivers spend on fuel. They can limit the type of fuel purchased, i.e., only diesel. Fleet cards can also limit the number of transactions or caps on each transaction.
Furthermore, drivers or customers of fleet cards must input odometer readings every time they use the card. Data collection offers businesses comprehensive analytics and usage statistics. This also may need a specific point of sale terminal to collect the pertinent data and process fleet card payments.
The different types of Fleet Cards available
There is some complexity to how fleet cards work. Various vendors offer many different types of fleet cards, such as Wex and Voyager. However, Visa and Mastercard offer their own fleet. Furthermore, there are specific store-branded card networks offered by particular brands. Below is a detail of the most common types of fleet cards.
Store Branded Cards – Fleet card offering without a traditional card network. It is purely a card associated with a particular brand, such as the ExxonMobil BusinessPro, offered exclusively through ExxonMobil, without a card network partnership. It is accepted only at ExxonMobil gas stations.
Universal Fleet Cards – These are fleet cards offered in partnership with traditional card networks and can be used anywhere those card networks are accepted. The ExxonMobil FleetPro Mastercard is a universal fleet card provided in collaboration with a traditional card network, Mastercard. It is accepted at ExxonMobil gas stations or anywhere that Mastercard is accepted.
A benefit offered by universal fleet cards is discounts on purchasing fuel or services at its own branded gas stations to encourage consumers to use that specific brand.
Fleet Cards – these are cards specifically for fleets regardless of gas station brand and are not part of traditional card networks. The most common fleet cards are by Wright Express (Wex) and Voyager.
Wex and Voyager cards can be used at any participating gas station. Still, businesses must have specific equipment set up for companies to accept them.
The benefits of accepting fleet cards
The benefits are straightforward. By accepting fleet cards, you open up your business to a swath of customers you would not otherwise have. This can include taxi, Uber and Lyft drivers, truckers, and other customers who use corporate or government fleet cards.
Again, it’s a way to get the customers in the door and then leverage that presence to upsell other services or merchandise.
The drawbacks of accepting fleet cards
One of the drawbacks of accepting fleet cards is that they usually aren’t part of traditional card networks like Visa or Mastercard. As a result, standard interchange rates that are the standard of such networks are not applicable. Instead, rates offered by popular fleet card companies such as Voyager and Wex start at about 3.25%. Furthermore, processors may charge additional fees for fleet cards, making it even more important to choose your payment processor carefully.
Finally, Wex and Voyager cards may require additional setup for merchants as they are not part of traditional card networks, and not all POS equipment manufacturers are attuned to them.
What do you need to accept fleet cards?
As fleet cards offer customers more robust data to analytics around usage, they may require additional setup for POS equipment to be configured for Level 3 enhanced data in order to accept Wex and Voyager cards. Today, almost all POS terminals have the required preinstalled applications to synchronize POS terminals. As a result, Wex highlights on its website that its cards are accepted at 95% of American gas stations.
Fleet cards are an excellent payment method to help businesses reduce fuel expenditure. This is welcome respite given the growing costs to fill up the gas tank and generally higher inflation everywhere. It is also a great way to encourage businesses to start spending again as many consider curtail spending.
Some fleet cards offer benefits other than lower prices, such as loyalty bonuses or discounts on tertiary services. Businesses still need to be conscientious of the different types of fleet cards offered by numerous vendors and their unique details in accepting fleet cards.