In its infancy, fuel cards were only printed with the company name, vehicle registration and a signature strip on the reverse. No electronic data was stored. Fuelling sites would verify the company, vehicle registration (on the forecourt) against the card and also the signature written on the back. The site would allow access to the fuel once the retailer's receipt had been signed for and cross checked against the signature written on the back of the card.
Initially, fuel card networks were very small and based around trunk roads and main haulage routes. For example, in 1983, the Keyfuels site network consisted of only seven stations. Therefore, they were initially targeted at haulage or delivery companies. A few years later, cards became embossed rather than printed. This was due to provide the cards with a greater longevity — frequent use would rub off the printed information.
Due to the lack of electronic data on the fuel cards at this stage, transactions would be recorded by the card being 'stamped' onto a manual transaction sheet. Further details detailing date, time, volume, grade of fuel and registration would be hand-written.
During the mid to late 1980s, fuel cards began to use magnetic strip technology. This meant fuel cards could be processed by a retailer electronically and reduced the risk of human error when recording transaction details.
Magnetic strips also enabled fuel card providers to increase fuel card security by ensuring PINs were encoded into the card. Although it should be noted that when the magnetic strip is swiped though a fuel card reader, the transaction is still only verified by checking signatories to this day.
In the advent of outdoor terminals, these PINs became compulsory in order to re-fuel.
The reasoning behind moving from the magnetic strip to smartchip technology was down to the fact that the magnetic strip could be cloned and the data written onto a dummy card. Also, the use of fuel cards was far heavier than that of debit or credit cards, and therefore it became apparent that the magnetic strip began to wear out far quicker.
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There are many reasons for/against the use of a fuel card over a credit card, which are outlined below:
Although fuel cards effectively 'look' like credit cards and use very similar technology, their use and implementation is significantly dissimilar enough to differentiate them as an alternate payment method. The main differences from credit cards are:
Fuel card providers realised there were many benefits from moving over to the smartcard from the magnetic strip:
As of 2007, only 50% or so of fuel cards on offer utilise the smartchip technology.
Fuelling limits can also be programmed into a fuel card using smartchip technology to specify the following:
The general procedure for using a fuel card at stations is as follows:
Outdoor terminals (pump operated):
Indoor terminals (cashier):
In most cases, fuel cards can provide fuel at a wholesale price as opposed to standard retail. This way, discount fuel can be purchased without needing to buy in bulk. For example, the CSI Fuel Card which not only allows businesses to secure purchases and prevent tampered usage but does not force bulk buying or high fees. These types of fuel cards are seeked out more actively in today's market due to the raising gas prices.
Furthermore, the management and security concerning fuel purchases is greatly improved via the use of fleet cards. These features often prove themselves attractive to businesses, especially with those operating large fleets which can sometimes be in the 1000s of vehicles.
For example, a business may obtain anything from a one to four pence per litre reduction (PPL) on diesel, which in real terms can be translated into the following (UK based) example:
|Fleet Vehicle Size||5|
|Volume Per Fill (litres)||45|
|Fuel Card Saving (PPL)||2.5|
|Total Saving (p/week)||£13.21|
|Total Saving (p/year)||£687.37|
Fuel card providers which operate on a bunkering basis aim to achieve a fuel reserve on a particular network in order to achieve a discounted price, therefore taking advantage of economies of scale.
For example, a company may purchase one million litres of diesel at 72.50 and aim to sell this on to the customer with a mark up of 2.5 pence per litre — 75.00 PPL.
Bunkered fuel card companies sometimes also offer customers their own fuel bunker to under the premise of further benefiting from a discounted price. Furthermore, a customer can also hope to achieve a saving by way of avoiding any market increases in the standard market price for that particular fuel. In short, customer fuel bunkering has many pros & cons:
In contrast to bunkered, retail fuel cards operate by way of allowing the customer to draw fuel at almost any fuelling station (in same method as credit card). Often the provider will levy a surcharge on top of the retail price as advertised at the fuelling station. The retail price given is often considerably higher than that of the bunkered.
Although retail is generally more expensive, there are a number of exceptions depending on the region, particular brand/site and timing of fuel purchased. Retail fuel can be cheaper in certain regions, particularly those near to a major port. Further reasons for the difference in price may be due to local economy (e.g. north / south of England) and whether the site is close to any main transport links i.e. the fuel costs more to deliver into the site. As for timing, the supermarkets or large providers often have a great deal of fuel in their stock reserves, so if the market increases rapidly, they would generally take longer than smaller providers to reflect this change.
Furthermore, retail fuel prices have decreased over the past 15 or so years largely due to supermarkets providing fuel at their superstores at hugely discounted prices in order to entice users to the store.
Research and Markets Adds Report: 'Commercial Fuel Cards in Europe: Market Size, Issuer Strategies and Competitive Success'
Mar 18, 2011; Research and Markets has announced the addition of the "Commercial Fuel Cards in Europe: Market Size, Issuer Strategies and...