Between invoicing and billing problems and the introduction of a much-discussed £2 transaction fee, Allstar parent company Fleetcor had a lot on its plate when Callum Gibson joined the business in January 2013 as the first ever managing director of its three UK fuel card businesses: Allstar, Keyfuels and The Fuelcard Company.
The first issue had reared its head before Gibson was even on board. Moving from one IT platform to another restricted functionality, leaving a significant number of customers unable to, for example, access the fuel card reports they needed to prove HMRC compliance or calculate reimbursement totals on fuel use.
“What we did at the back end of 2012 was a full business migration; we were on legacy platforms and needed to migrate away from that,” Gibson explains to BusinessCar. “We were aware pretty early that there were issues customers were facing. We recognised that and moved heaven and earth to address it.” He claims Fleetcor invested £1m in additional staff and involved the company’s global IT experts in trying to iron out problems as quickly as possible, which was by mid-February to March of this year for “most customers”.
“We hold our hands up and say we didn’t meet the high standards we set ourselves,” admits Gibson, although he says that no transactions failed during the migration. “The lessons have been learned, and us explaining some of the system changes and changes in reporting would have enabled the pressure they felt to be mitigated.”
Allstar changed the appearance of its report at the same time, and consolidated some reports, which it admits it didn’t communicate well. “We need to educate customers to take them on the journey with us,” declares Gibson. “The changes to the reporting suite are something we could have done better.”
But that was just a precursor to the storm that followed Fleetcor’s decision to introduce a £2 charge on every Allstar transaction, known as the Network Service Fee, which Gibson admits was also not communicated well enough.
“We provide a significant service to our customer base and we have a desire to continue to invest in that network and provide product differentiation we haven’t seen in seen in that market,” he explains. “The Network Service Fee is going to bring a batch of new products and applications to the market that customers will see value in.”
The first of these is what Gibson claims will be an industry-leading chip and pin introduction coming next year in partnership with Visa, something he says involved “double-digit millions of pounds of investment on our part”.
“The investment was going on in the background – something we weren’t consistent in telling people – and at the end of 2013 and into 2014 we’ll see investments coming to bear and people will start seeing the benefits.”
To get the partnership with Visa up and running, Allstar needed to visit every petrol station that accepts its card – which is 95% of UK forecourts – to reconfigure the card terminal ahead of the roll-out that starts in April 2014. The target is to have all Allstar customers onto chip and pin by the end of next year, if not sooner.
“To introduce a fee for a service is always difficult, especially when customers have had years with no fees,” Gibson acknowledges. “With hindsight, the focus would be a lot more on the customer value proposition and helping customers understand who we are with the network, service and the value add we bring to the business – be it Visa or a number of other developments in the pipeline – and we’d talk to them about how we will manage in the future.
“Coming from the world of banking, if people pay a fee, they need to understand the value of that; if they understand the fee they’ll engage with the product and engage with the features,” Gibson continues.
The move to Visa will have numerous benefits for fleets, not least cutting fraud by allowing businesses more control over transactions. Either set by Allstar or the fleet itself, there will be the capability for individual cards to be programmed so only certain fuels can be purchased; for example, so that premium fuels are barred or drivers with a diesel car are blocked from buying unleaded fuel. Refuelling frequency can also be limited – such as to £100 per day and only twice per week – while teaming up with Visa has also given Gibson hope of extending Allstar’s coverage to take in every single filling station in the country and to allow drivers to use pay-at-pump services.
In the longer term, Visa could also enable Allstar to add other non-motoring services to its portfolio, so that, hypothetically, hotels or train travel could be paid for with the card.
“In the future it will enable us to provide other services. If you look at Fleetcor globally, we have a hotel and lodging business in the US,” Gibson says. “There are no specific plans in the UK, but other markets use the same transaction and payment mechanism.” Using Allstar in railway stations would take significant effort to implement, as the firm would have to visit every site and upgrade each card terminal. At the time of the deal’s announcement, Visa Europe’s head of business development Steve Price said: “I look forward to extending the partnership beyond the first implementation”.
Allstar’s new developments go well beyond the chip and pin introduction, with new fuel cards being added to the core offering. The first was announced in September, with the Supermarket Fuel Card being targeted at SME businesses focused on keeping costs down at the expense of a little of the flexibility of the regular Allstar card. Accepted at Asda, Morrisons, Sainsbury’s and Tesco, it also offers the same HMRC compliance reporting as well as invoices for fuel and oil purchases. The firm also launched Allstar Plus in July, offering AA cover on a pay-if-you-need basis for breakdown and misfuelling recovery, as well as guarantees of discounted prices at a nearby repair centre.
Coming early next year is the Allstar Premier card. Gibson was loath to part with concrete details, but he said it will be “probably the most advanced and capable product we can put in customers’ hands and allows fleets to manage fuel cost in a way no card has done in the past”.
Moving into mobile apps is also on Gibson’s agenda, with Fleetcor having knowledge and experience in the US that he hopes to utilise on this side of the Atlantic.
“We’re pretty strong in the mobile application space. I see us moving to a space where card and app work together, and you can pair the card with the technology to enable fleet managers to undertake certain activities or the driver to fully understand where the most appropriate filling site is,” he says. “These apps are hugely advanced in the US and will be a significant focus area for us going forward. Because of our scale, we probably have the most fuel data of anyone in the UK and we want to bring that to bear for customers to check for low-cost fuel at the most recent prices we have.” The enhanced technology could also see targeted special offers from third parties, such as fuel companies, marketed to drivers through the app.
These developments come at a time when there is a decline in the amount of fuel being purchased due to a combination of factors, including cars becoming more efficient and cost-cutting and travel policy changes that have led to fewer journeys.
Gibson is looking to make more noise about Allstar’s strengths as part of the charm offensive, to educate customers about the benefits of the card, especially as there’s no charge for changing from one supplier to another in the sector.
“We know we’ve got the best network in the UK, but we don’t shout about it and we don’t tell customers about it,” he says. “On the customer side we were able to rectify the quality and hold our hands up, and I’m confident that going forward people will see that we are a business looking forward to driving enhanced products and services in this field.
“We’re in an exciting space now – we have an existing customer base and I want them to understand our value proposition and understand
the additional services we will bring and that we will be offering different product sets to encourage new customers into our brand,” continues Gibson. “Some fleets have been with us 20 years or more, some only for a minute, and my goal is to provide products and services that meet the ongoing challenges their businesses face.”
Who is Fleetcor?
Established in 2000 with the acquisition of American fuel card business Fuelman, Fleetcor now has 2650 employees across 43 countries and processed 311 million transactions in the 12 months to June 2013. It has more than half a million commercial accounts in North America, Europe, Africa and Asia, and acquired the UK’s dominant fuel card provider Allstar from leasing firm Arval in a £194m deal at the end of 2011.
Allstar covers 95% of the UK’s filling stations, which is around 8000 sites, making it by far the most wide-reaching card.
In the UK, Allstar has two sister cards also owned by Fleetcor – Keyfuels and The Fuelcard Company – both of which have a future independent of Allstar, according to Fleetcor UK boss Callum Gibson.
“Some businesses don’t want an Allstar card, they feel more affiliated to Keyfuels or The Fuelcard Company,” he tells BusinessCar. “Our goal will be to provide customers with choice and value propositions they can relate to and will be developing across all of our businesses.”
Fleetcor has been very acquisitional since it was established, picking up more than a dozen fuel card business worldwide as well as telematics and workforce lodging operations, on top of launching new products and winning processing contracts for the likes of BP in America. It bought Keyfuels in 2006, The Fuelcard Company in 2007 and Retail Decisions in 2009, which was rolled into The Fuelcard Company, before adding Allstar in 2011. Most recently from a UK perspective, the firm bought multiple BusinessCar Award- and BusinessCar Techie Award-winning fleet maintenance expert Epyx. The Solihull-based operation’s purchase marks another attempt by Fleetcor to branch out beyond its fuel card roots. On the same day it announced the Eypx acquisition, Fleetcor also confirmed it had bought US telematics company Nextraq, which has more than 100,000 subscribers across 6000 customers in the US.
