2011 TRENDS IN

FLEET CARD PAYMENT SOLUTIONS

Dan Stiel

Stiel Direct LLC

TODAY’S FLEET MARKETER’S

CHALLENGE

Embracing the Payment Solution to Build Market Share

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Present You the Most Relevant Information & Trends in Fleet Cards

Our Goal Today –

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STIEL DIRECT’S QUALIFICATIONS

Principals experienced working with all major fleet card issuers

Fuelman, WEX, Voyager, Visa Fleet, others

Over 25 years individual experience in fleet and commercial credit card

marketing and product development

Bank of America, First Interstate Bank/Wells Fargo, Visa USA, Citibank, Chase, others

Formerly Director of Payment Systems for Tosco & Circle K

In-depth market research capabilities

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STIEL DIRECT’S FLEET PAYMENT STUDY

Focused on entities that owns or operates from 5 to 300,000 vehicles

for business purposes on public roads during 4th Quarter 2010

Across a broad scope of private & public sector fleet operators

throughout the United States

Designed to measure fleet payment preferences, and the opportunity

for fleet merchants to use the payment proposition to build market

share

Help clients define the impact of changing payment habits and

preferences of fleet operators across the United States

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TYPES OF FLEET VEHICLES STUDIED

Fleets operating automobiles, motorcycles, light-duty trucks, and heavy-

duty trucks

Fueled with gasoline, diesel, or an alternative fuels, such as propane,

natural gas, or electricity

Fleet vehicles that refuel and obtain maintenance services at a retail

service stations, truck stops, cardlocks, and private on-site fueling

facilities

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RESEARCH & INFORMATION SOURCES

Stiel Direct’s proprietary research methodology weighted against industry

demographics

Telephone survey to 200 fleet managers

Mail-in survey to 3,500 small business owners

Focus Group panels in three cities

United States Department of Energy

United States Department of Transportation

Syndicated fleet card studies

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A DEFINITION OF

IMPORTANT TERMS Fleet Industry Terminology

ENHANCED FLEET DATA

Includes all of the following:

Odometer readings

Product purchase detail - products/grades, and quantity/gallons purchased

Driver and/or vehicle IDs

Fuel Tax information

Financial & Transaction detail - date, time, location, spending, etc.

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A HISTORY OF FLEET CARDS

Government agencies and private enterprise have used oil company

credit cards and proprietary on-account billing systems since at least

the 1930s

Enhanced fleet cards introduced in 1980s & 1990s to fight fraud, misuse,

and provide improved management reporting

Fuelman, Wright Express, and many others introduced their own brands of fleet

cards

Oil Companies improved offerings

Banks and Card Networks have offered specialized purchasing cards for fleet

operators

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THE VALUE OF ENHANCED DATA

The basis for flexible reporting tools - exception, tracking, and control

reports

Used to monitor vehicles and driver performance:

Evaluate expense efficiency

Monitor policy compliance

Analyze purchasing patterns

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TRENDS IN FLEET PAYMENTS

Among all fleets studied, use of cards is growing 15% annually

42% use Enhanced data fuel cards

27% use Basic oil company proprietary cards

20% to 35% use Bank cards, ATM/debit cards, and T&E/Corporate credit cards

10% to 20% still use cash or direct billing arrangements with local fuel

marketers/distributors, but is declining in favor of fleet cards

Note: Numbers total more than 100% due to multiple payment options used.

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GOVERNMENT PAYMENT SOLUTIONS

Use of fleet cards is a major initiative for Federal, State, and Local Agencies

Governments seeking enhanced solutions for managing fleet expenses - Fleet Cards

considered key component of fuel and fleet expense management

Key Strategic Initiative for many fleet suppliers

Government agencies decision making varies by agency, and was included in study

database

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FLEET PAYMENT SELECTION METRICS

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Attribute Importance Fleet Rating Cards

Consistent Pricing High Yes

No Fees High Varies

Discount Pricing Opportunity High Yes

Fraud Protection High Yes

Wide Site Acceptance High Yes

Detailed Reporting Medium Yes

Maintenance Reporting Medium Yes

Card-less Transponders Medium Future

HOW DRIVERS USE FLEET CARDS

Off-site fueling

Fuel Only (85%)

Both Fuel & Maintenance (10%)

Fuel, Maintenance, Business Expenses (3%)

Maintenance Only (2%)

On-site fueling & maintenance facilities

Various accounting practices, but little fleet card usage

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THE MARKET FOR GENERAL PURPOSE

FLEET CARD PROGRAMS

Less than 5% of fleet managers are comfortable with their vehicle

operators having the ability to use cards to conduct transactions

beyond vehicle expenses

Overnight vehicle travelers, including long-haul truckers and sales people

Executives and traveling sales personnel driving company cars

Limited benefits for the vast majority of fleet managers

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TRENDS IMPACTING FLEET CARDS

Increased use of enhanced data-capture fleet cards for all variable fleet

expenses

Fuel, maintenance, repairs, vehicle appearance/care, replacement vehicle rental

Increased use of exception reporting based on fleet credit card

transaction data

Improving Web-based card/driver account management control systems

and reporting

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TRENDS IMPACTING FLEET CARDS

Integration of fleet variable expense management into corporate

purchasing/accounting legacy systems

Wireless and transponder technology will improve vehicle data

gathering, reporting, and analysis

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TRENDS WHERE FLEETS PURCHASE FUEL

Among fleet operators of all types, fuel is purchased from over 195,000

fueling sites

Retail service stations: 75%

Cardlocks & truck stops: 17%

On-site fueling facilities: 8%

On-site fueling is continues to be viable to many operators, but is

declining rapidly

Fleet Cards can provide enhanced control and accounting advantages when used at

on-site fueling facilities

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FLEET CARD REPORTING TRENDS

Fleet managers increasingly want reports that are comprehensible,

comprehensive, useful, flexible, and actionable

Most fleet managers find sophisticated reporting helps run fleets more

efficiently

Maintenance reporting is growing in importance as fleet managers

continue to become comfortable with enhanced reporting capabilities

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EXCEPTION REPORTING TRENDS

Fleet Card data is increasingly used to identify exceptions to fleet

policies, practices, and budgets

The ability to view exceptions by vehicle and drivers allows greater efficiency and

flexibility in managing a fleet

Fleet operators vary in the exceptions they want reported

Fleet managers establish parameters for each exception when their account is set-up,

and change it as needs dictate

Fleet Cards offer sophisticated and flexible exception reporting

capabilities to fleet operators

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TRENDS IN FLEET VEHICLE REPAIR,

AND MAINTENANCE EXPENSES

For every dollar spent on fuel, fleets spend an additional 20 to 40 cents

on other fleet variable expenses

Fleet Cards are improving information capture on fleet repair, vehicle

washes, & maintenance expenses

Managers use reporting to reduce expenditures for these activities

through vendor negotiation and monitoring procurement

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NEWEST TRENDS

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GPS Technologies

80% of business fleet operators

use GPS devices in at least some of

their fleet vehicles

27% of fleet drivers use GPS to at

least “occasionally” to find fueling

locations

Mobile Technologies

67% of drivers use smart phones

(described as phones with at least

web-browsing capabilities)

23% of fleet owners are “very

interested” in in-vehicle mobile

tablets and apps that improve

driver productivity and efficiency

12% of fleet drivers use text

messaging to find cheapest fueling

locations

MOST VALUABLE FLEET CARD REPORTING

INFORMATION

Date, Time, Location of Purchases

Cost Per Mile

Brand & Types of Fuel/Services Bought

Other Products/Services Purchased

Driver-input Odometer Readings

Number of Gallons/Quantities Purchased

Price Per Gallon/Unit Paid

Total Purchase Amount

Miles Per Gallon

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TRENDS IN FLEET CARD ENHANCEMENTS

Fleet Cards are adding valuable enhancements

Driver Assistance Center

Auto Rental Insurance

Emergency Card and Cash Replacement

Liability Waiver Programs

Travel and Emergency Assistance

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STIEL DIRECT STUDY

CONCLUSIONS

Fleet Card

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FLEET CARD STUDY CONCLUSIONS

Enhanced Fleet Cards increasingly delivers significant value to fleet

vehicle operators by offering

Enhanced data capture

Robust reporting

Wide merchant acceptance

Organizations are attaining positive economic benefits

Proactively using Fleet Card information and controls

Some fleets are integrated reporting of Fleet Card transaction data with Purchasing

Card & Corporate Card data

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MORE CONCLUSIONS

95% of Fleet Managers prefer payment solutions that limit usage to

vehicle related expenses when appropriate

Less than 5% of fleet managers have a need for Credit Card programs

that offer expanded purchasing capabilities beyond traditional vehicle

expenses (e.g., Visa Fleet, MasterCard Purchasing, or AMEX)

Merchants need to embrace fleet payment solutions as a cornerstone to

effective fleet marketing solutions

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THANK YOU!

Dan Stiel

Principal Researcher

Stiel Direct LLC

www.stieldirect.com

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