A key feature of a fleet fuel card is the ability to set restrictions on purchases made by the cardholder. Established by the administrator at the time the card is activated, these restrictions can limit or stop purchases by the gallon, fuel type, day, time, amount, and even where it is purchased. This allows the fleet manager to set limitations on risk exposure to fraud and abuse of the card. The cardholder only needs to input a personal identification number (PIN) to verify authenticity of the card, and if prompted, the mileage of the vehicle the cardholder is operating. This allows the capture of Level 3 data at the point of sale and gives the fleet manager a thorough detailed report of the transaction.
The card in use by fleet fuel companies, as well as banks, credit unions, and credit companies, is the mag-stripe card. It refers to the magnetic stripe code on the reverse side of the card. In North America, the magnetic stripe card is the predominate card used for cashless transactions. The technology is over 40 years old and frankly the usefulness of the cards fraud protection features have been successfully defeated time and again. The availability of card readers and encoders to the public have enabled crooks to use stolen credit card information and steal directly from the merchant.
Our European counterparts have an advantage by using chip and pin’ technology aka ‘smartcards’ that resist fraud more readily. The Europay, MasterCard, Visa (EMV) standards have significantly reduced the fraud occurrences that give smartcards the benefit of security but in North America the cost of refitting the thousands of point of sale (POS) and Automated Teller Machine (ATM) locations would be a costly venture. Instead, companies like MasterCard, Google, and Apple are turning to mobile devices that process payments effortlessly using Cloud technology.
The payment technology using smartphones is now emerging as a potential leader in cashless, contactless payment processing. These systems use encrypted authentication codes unique to each transaction. In other words, a one-time authentication code for each user, for each payment request. By doing so, the fraudster has no means to duplicate the information and re-use that stolen information to commit an unauthorized transaction. In addition, the mobile hardware device acts as your wallet, it’s simply built into the wireless phone, tablet, or laptop. A downloaded app initiates the software needed to activate and link your account to the mobile device with your banking connection and the vendor’s receiver where intended to make your purchase. Just like our current fleet fuel cards, the administrator sets the restrictions on the purchase type, amount, gallon, etc. and is able to review the Level 3 data that is uploaded through the app or program.
With any new technology involving access to payment processing, a certain amount of skepticism exists. Essentially the technology known as Near Field Communication (NFC) that enables the communication between devices has origins in Radio Frequency Identification (RFID). RFID allows a reader to send radio waves to a passive electronic tag for identification, authentication and tracking. These NFC payment processors work within the mobile device’s capability and as North America’s coverage becomes universal, the ability of 4G and LTE systems seem likely to reach even the most remote locations for a reliable network to support mobile device connectivity and usage. The only question at this point is the platform different hardware devices select to power their NFC software.
Apple users are still hamstrung with the limited NFC choices of payment processing with the Apple 6 only capable of using Apple Pay. The benefit Apple is touting is the increased security features with their ‘tokenization’ for each payment, which seems redundant. Google Wallet is also limited, only offering an operable system on the Android 4.4. MasterCard is using Pay Pass, which is operable for both Android and Blackberry platforms, for it’s NFC vehicle. Expect that Samsung and Visa to team together to offer Paywave on the Galaxy S4. Perhaps the best of these is Microsoft’s NFC platform, which uses ‘Wallet Hub’ in the Window Phone 8 or the Windows 8 systems. Unlike the competitors, Microsoft’s NFC can integrate multiple payment services within the single application. With the increased competition and knowledge by users on differing systems, likely platforms like Microsoft’s will succeed and lead the market share for NFC payment processing.
So how does this relate to the fleet fueling industry? Very simply, expect many unmanned POS kiosks to emerge with this new technology that currently serve mag stripe card readers. Fuel pumps will certainly be in that category and the technology with NFC readers will arrive in the next decade for most fueling stations in North America. As the skepticism wanes regarding identity theft and fraud, more users will adopt NFC with their mobile device, and more real time information can be transmitted from the driver to the fleet manager, an obvious benefit that will move the fleet fuel card industry toward NFC based payments.