Treasury and Trade Solutions

From Clunky to Cool — Innovating Cards

New technology will liberate company car drivers from carrying multiple fuel cards, and wasting time (and fuel) searching for specific fuel retailers, while offering a modern mobile-first experience. At the same time, it can improve policy compliance, make reconciliation easier and save money for corporates, writes Ritesh Jain, B2B Product Head EMEA, Commercial Cards, Treasury & Trade Solutions at Citi.

European company car fleets, which corporates maintain for their employees’ business and personal travel, represent a sizeable proportion of cars on the region’s roads: in the largest five European markets (France, Germany, Italy, Spain, and the UK), new car sales to fleets made up almost a quarter of all passenger car sales in 2019.1 Yet fleet car management has always been challenging, both for companies and drivers.

To manage costs and maintain travel policy compliance, company car fleets have traditionally used Ritesh Jain fuel cards. Fuel cards enable drivers to pay for fuel and let them capture their vehicle’s mileage at the B2B Product Head time of fuel purchase, allowing organisations’ expense processing departments to reconcile spend EMEA, Commercial at the end of the month and verify policy compliance. When they were introduced in the 1990s, fuel Cards, Treasury and cards were a clever advance over credit cards. They not only allowed fuel retailers to electronically Trade Solutions, Citi record fuel purchases with the card issuer but also facilitated the capture of vehicle-related data (such as the odometer reading) to be passed along with the purchase. This data-rich purchase recording capability was the USP of fuel cards.

However, technological innovations that have so dramatically revolutionised the cards industry seem to have largely bypassed fuel card offerings, meaning they are stuck with age-old infrastructure that makes the user experience clunky by today’s standards.

1 https://www.automotive-fleet.com/344649/european-market-global-report 2 Treasury and Trade Solutions

The problem with traditional guess work when keying in the reading, or simply typing in a random number. As a result, data received by the corporate fuel cards is unreliable and can lead to inaccurate tax calculations and One of the biggest drawbacks of traditional fuel cards is the potential audit concerns about expenses. restriction on where they can be used. Most fuel cards are On top of all this, most fuel cards are still on magstripe- ‘closed loop’, i.e. they can only be used at designated fuel based plastic, do not support contactless or mobile wallets pumps, generally limited to a specific fuel retailer’s brand. and generally lack an intuitive user interface for drivers to This is a recipe for poor driver experience and inflated manage their accounts. In short, fuel card products are stuck operational costs. Drivers often have to deviate from their in a time warp while technology has fundamentally changed usual route simply to get to a pump that will accept their the way the rest of the cards industry operates. fuel card, which is a frustrating experience. One study noted that route deviation is not only a source of driver angst, but results in significant added cost to the business, costing as Leveraging technology for much as €1.20 per minute2 in increased fuel cost, and loss a new approach of productive time. Historically, the challenges described above have been Many companies attempt to overcome this hurdle by having insurmountable. It has been impossible for fleet managers 3 multiple fuel cards from different providers. Drivers often to use a single fuel card because no single open-loop complain about having to carry multiple fuel cards in their card provider has the reach to update all PoS terminals pocket (in some cases; as many as five) and remembering across fuel stations to facilitate data elements such as the specific operational nuances of each. It’s not just the odometer reading and vehicle ID to flow through with drivers that have to deal with the hassle of multiple cards. the transaction. The infrastructure, therefore, remained Fleet managers and their operations colleagues can also brand-specific and providers’ business models further end up with significant administrative overload as each encouraged exclusivity. Consequently, in order to get wider provider has its own contract, pricing, native file formats, acceptance at pumps, fleet managers have had to shoulder and reporting capabilities. Managing multiple supplier the administrative and cost burden of multiple fuel cards. relationships and standardising data across multiple In 2019, Citi conceived a new way to overcome these barriers providers can eat up valuable organisational resources. by leveraging technology to leapfrog legacy infrastructure Unfortunately, the pain doesn’t end there. Even after issues. Using the principles of a platform-based approach, drivers get to a fuel pump that accepts their fuel card, the Citi has integrated its card systems with the platform 4 experience is far from ideal. The purchase process requires offered by The Miles Consultancy (TMC) . The result is drivers to memorise their vehicle’s odometer reading and a smart, intuitive fuel card solution that combines the key it in at the point-of-sale (PoS) device when paying advanced features of Citi’s proprietary global cards platform, for fuel. A random five- or six-digit number is not easy to unparalleled reach of world-leading payment networks such remember — that is assuming the driver even looks at their as Visa, and the mobile-app based user interface of TMC. dashboard before heading to the till. Often drivers resort to

2 The Miles Consultancy (2018 analysis performed in partnership with a multinational conglomerate of commercial products & engineering services). 3 Open-Loop refers to cards that are not restricted for use at specific retailer brands. They can be used at any merchant that accepts an electronic card payment. 4 The Miles Consultancy (TMC) is a UK-based company that consolidates, analyses and audits data from multiple sources to help clients reduce their fuel bills across the EMEA region. From Clunky to Cool – Innovating Fuel Cards 3

Universal acceptance — A single card is all you need The solution brings together Citi’s new fleet card can be used at any two powerful components: fuel pump that accepts credit cards. This universal acceptance puts drivers Citi’s Fleet Card — a contactless-enabled card that can be used and fleet managers back in control of anywhere that Visa/Mastercard is accepted where they fill up rather than being shackled by the exclusivity of fuel Mobile App — by our award-winning partner TMC, allowing seamless brands. For drivers, this is often a tracking of mileage, receipts and reports liberating experience that allows them to get on with their business most efficiently. It also empowers them to make a prudent of when fuelling up — using company CLIENT PAIN POINTS resources judiciously.

For the fleet manager, the solution enables lower operating costs for their fleet by lowering fuel 1. 2. consumption and avoiding the loss Multiple fuel providers: Costly process: drivers cardholder has to choose incur additional fuel of productive employee time. In from closed-loop costs driving to eligible addition, fleet managers no longer fuel networks fuel stations have to deal with multiple fuel card providers to gain coverage bringing significant administrative savings — a single card is now capable of covering the needs of their entire fleet across Europe. 3. Time consuming process: 4. Prone to errors: it is a drivers may have to manually hassle to reconcile journey key odometer readings into and expense data, leading Smartphones make terminals, and keep track of to gaps and inaccuracies fuel cards smarter: receipts after the journey A mobile-first experience HOW CITI CAN HELP Citi’s Fleet Card is simple to use — yet ingenious. Once enrolled, drivers receive a Fleet Card along with a customised mobile app. When the driver pays at the terminal, the TMC 1. Single card: that 2. Save on costs: efficient app on their phone automatically can all fuel routes and expense detects the payment and prompts the networks where Visa management leads to an driver to enter an odometer reading; and Mastercard average fleet fuel cost they can do this when they are back are accepted reduction of 15%5 in the car, so they don’t have to remember a long numeric sequence. In fact, for some car models, drivers can simply scan the odometer; the image is then processed by optical 3. 4. character recognition and entered Improved user Automated reporting: the experience: drivers platform uses data mining as data. Similarly, drivers can take a can digitally enter mileage to combine multiple data picture of the fuel receipt from their data via the app which sources into one management mobiles, which is then automatically prompts them to enter the dashboard for fleet oversight, attached to the transaction. mileage data VAT reconciliation, payroll files, ensuring strict controls

5 Average audited fuel savings realised by TMC clients using the platform for a minimum of three years. In addition to the modern and simple driver experience, In addition to a superior driver experience, operational the solution also greatly simplifies and accelerates benefits and efficiencies, there are also financial benefits reconciliation for the corporate; Citi sends a daily card for corporates. The Fleet Card offers an opportunity transaction file to TMC, which then combines it with to extend payment terms and lengthen days payables the odometer reading, receipt scan, vehicle telematics outstanding, helping organisations to optimise their and other data points to automate reporting. Reports working capital. And Fleet Card programmes, like all Citi can be customised to cater to various stakeholders Commercial Cards, offer the possibility to earn financial within a company such as Accounts Payable for expense rebates from card use. processing, Human Resources for payroll processing, the Tax department for VAT accounting and Management Age-old problem + fresh approach Information for informed decision making. In addition, audit reports can red-flag any deviant driver behaviour (such = Innovative new solution as overfills, multiple small fills, unnecessary motorway Albert Einstein is widely quoted as saying “we cannot solve fills, etc) and suggest best practices to lower overall costs our problems with the same thinking we used when we for the company. As a result, the Fleet Card can play an created them”. Too often, organisations don’t challenge important role in driving travel policy compliance and the way things have always been done and instead accept lowering costs overall. the status quo. Citi’s approach of using the principles of platform models has challenged the established norms Going the extra mile… of the fuel card industry and is an example of how a new thought process can overcome barriers that previously The Fleet Card solution comes pre-packaged with a seemed insurmountable. number of other features. For instance, the app has GPS- based tracking so when the driver uses their vehicle for Citi has combined the power of a global financial network business (as opposed to personal) mileage, they can pre- with a state-of-the-art fuel management platform. As a set times (e.g. 9 to 5) on the app to record their journey, result, there is finally a solution that: eliminating paperwork associated with documenting business travel. 1. Truly delivers a modern mobile-first experience to drivers; The app is also integrated into Google Maps, allowing the 2. Relieves fleet managers of the administrative overload of driver to find the nearest or cheapest filling station, for managing multiple suppliers; example. This integration also ensures that drivers take the optimum route, reducing their travel time, lowering fuel 3. Delivers tangible cost savings for the organisation. costs and reducing their carbon footprint. By capturing The mobility industry is rapidly changing — thankfully fuel accurate business mileage and expenses relating to cards can now claim to be keeping up with the times. transport, the Fleet Card can help companies to report their CO2 emissions more accurately.

The user interface for Programme Administration also allows fleet managers to invite drivers to apply for new cards, adjust limits on any of their fleet cards, block cards in real time and much more.

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