SP ECI A L REP OR T: B A R CL AYC A RD & T MC
Barclaycard and TMC to shake up fuel card market Fuel+ mixes widespread acceptance of Visa with data capturing and auditing
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he fuel card market has been ripe for a shake-up for a long time, according to John Bostock, of Barclaycard Business Solutions. “It’s a huge market in the UK and dominated by a small number of big players, so we thought it was time to offer something new,” says the company’s head of corporate and enterprise business. Barclaycard Fuel+, a new fuel card launched in association with The Miles Consultancy (TMC), merges the company’s almost complete acceptance of Visa at fuel outlets with data capture and auditing from TMC. Bostock predicts the card can save fleets on average 25% on their business fuel spend. It is this potential saving that Bostock believes sets Fuel+ apart from its established rivals and what will attract new fleet customers. During a pilot trial from 2012 to 2013, the card was used by 30 fleets in the UK. One company reported a saving of £400,000 on its fuel bill with a further £500,000 expected to be cut in the following financial year. Bostock says: “This market is worth £6-7 billion per year in the UK, so there are clearly cost savings to be made when so much is being spent on fuel. “The difference in our approach is not to calculate fuel spend on a pence per litre basis, but to look at the cost per mile which gives fleet managers a much clearer idea of what is being spent by each driver. By using micro-analysis, it creates a much bigger picture.”
IMPRESSIVE SAVINGS While such impressive savings as the one mentioned above are accessible only to large fleets, Bostock is quick to point out the cost benefits to the majority of fleet operators. “To begin with, we have worked with larger fleets with a fuel spend of £500,000 or more per year,” he says. “However, this has quickly converted to fleets with a fuel spend of around £100,000 that can experience the same percentage savings.” Fuel+ saves an average of 25% on a company’s business fuel spend*, according to the trials, but TMC also guarantees that customers will save at least twice their annual investment in the first year. If the customer’s saving doesn’t amount to double TMC’s fee of £3 per card per month, the company will make up the difference in the form of a refund**.
“We are expecting a large increase in customers in the next 18 months and we’re geared up for that” John Bostock, Barclaycard Business Solutions
Bostock says a key element to the savings comes from being able to separate business mileage from private. “Our partnership with TMC means fleet managers using Fuel+ can see real-time information on the fuel use of each individual vehicle,” he adds. “This means any irregularity is easily spotted and can be raised with the driver to check everything is okay. “This is also a safeguard against card theft. It also allows a fleet manager to see which brand of fuel is being put into the vehicle, the amount and where it’s being filled. “As Barclaycard’s huge Visa coverage for Fuel+ means it can be used in almost any fuel station, it also means fleets are not restricted to one retailer so they can choose to buy fuel from the most cost-efficient outlet.”
£6-7bn approximate worth of fuel card business in UK each year^
£400k saving made by one company taking part in trials of Barclaycard Fuel+
MARKET NEEDS MORE COMPETITION In the UK, there are more than 8,400 fuel retailers and out of those only 24 have been found by TMC to be unable to accept Fuel+. In most cases this is because the fuel outlet is classed as a supermarket or convenience store rather than fuel retailer, but this is easily solved with a call to the dedicated customer support centre operated by TMC. Barclaycard’s partnership with TMC is another key strength for Fuel+ in Bostock’s view. He says: “TMC shares our opinion that the fuel card market needs more competition, while fleet managers John Bostock: ‘It has been a long require as much accurate data as possible and as quickly as time since a big they can get it. brand has come “With TMC, we can offer this and the ability to audit data into the market’ in a way that suits the fleet customer’s needs.” TMC’s Mileage Audit is included in the monthly charge. It includes mileage capture, distance audit by postcode, processing of deductions for private versus business mileage, data analysis for anything out of the ordinary, a fill-by-fill algorithm that flags up any problems and a duty of care declaration. This comprehensive package can be added to with DVLA checks. Another option for businesses is TMC’s Mileage App, which is free to download but the customer pays 50p per driver per month to access the system***. This lets the driver record mileages using their mobile phone. Combined with automatic tracking of mileage, the app lets a fleet manager very accurately separate business miles from private use and be * This is based on first year business fuel savings of 24 TMC customers calculated aware of any instances where the vehicle is being in 2012. used outside its normal duties. ** If your first year saving doesn’t amount to As Fuel+ uses Visa, it can also be used to pay for double the TMC fee, TMC will make up the associated costs such as road tolls, parking and difference *** This is an additional charge and doens’t congestion charges. need to be part of the original customer’s Alternatively, a fleet manager can restrict the use investment of the card to fuel spend only. ^ Based on 14% share of £40bn UK retail fuel This sort of adaptability is possible as Barclaycard volume. Petrol Retailers Association 2014 is a leader in chip and PIN technology rather than simply a fuel card supplier.
In association with
IN ASSOCIATION WITH
Fuel+
4864 Month/Year Valid From
As Fuel+ uses Visa, it can be used to pay for associated costs such as road tolls
Month/Year
VISA CORPORATE
Expires End
Bostock sees this as a key appeal of the Fuel+ card and says: “The chip and PIN technology is a big differentiator between Fuel+ and many other fuel cards. It means it can be used at self-service filling stations where other cards require the driver to physically present it to a cashier. “Chip and PIN makes Fuel+ incredibly safe and secure to use. “Whether the card is linked to the vehicle or the driver, the PIN is unique and it can also be changed at any cash machine displaying the Visa sign if the user is worried the PIN might have been compromised.’ The Fuel+ card will be locked and prevented from further use if the person using the card enters the incorrect PIN number three times in succession. It also comes with a misuse warranty where Barclaycard protects the fleet user from fraud. Bostock adds: “Combining the ease of use of a Visa card with chip and PIN security, as well as the data available to a fleet manager, makes the Fuel+ card a truly end-to-end solution for fleet customers. “As part of this approach, it has been designed to help with HMRC compliance for VAT. It means the vehicle driver is freed from having to collect VAT receipts, unless the employer specifically asks for them.”
ENHANCED VAT RECLAIM By providing accurate data for each vehicle on a fleet for its fuel use, the VAT element is another area where companies can save money with Fuel+. An enhanced VAT reclaim of up to 40% more than otherwise possible represents a considerable financial incentive to businesses. As an option, Fuel+ can be used with a receipt management service from TMC. Bostock says: “It has been a long time since a big brand has come into the market and a certain amount of education is needed to illustrate the differences and benefits of Fuel+. “However, we know that when fleets look at it and realise the savings that are there for the taking, they quickly become customers. “Also, I think it’s telling that out of the businesses involved in the original pilot of Fuel+, every one has stayed with us. “Due to this experience, we are expecting a large increase in customers in the next 18 months and we’re geared up for that. We want to be a significant player in this sector, so our ambition is a 5% to 10% market share in this period.” These might seem like modest goals given the size of the market, but there is no doubt Fuel+ is already achieving its first aim of shaking up the fuel card market.
SP ECI A L REP OR T: B A R CL AYC A RD & T MC
New product ‘is more than a normal fuel card’ Fuel+ analyses data to identify potential savings, says TMC’s Paul Jackson
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fuel card is like a wallet stuffed with cash, so you have to be very careful with it, says Paul Jackson, managing director of The Miles Consultancy (TMC). The company has been working for three years in partnership with Barclaycard to develop the Barclaycard Fuel+ card. “A normal fuel card allows the user to pay for fuel and related goods,” he says. “Fuel+ does all of that as well as working out if the spend is appropriate for that vehicle by auditing the mileage and the profile of the vehicle. It studies the detail to give a complete picture.” It is collecting this data, analysing and presenting it to fleet managers that TMC specialises in to create a single, consolidated answer to fuel purchase and management. Using TMC’s Mileage Capture and Audit technologies, Fuel+ has already shown average savings of 25% for fleets using it and it comes with a guarantee it will save fleets at least twice the £3 per driver monthly charge**. The savings come from a number of links in the fuel card chain, says Jackson. These start with the vehicle, which can be tracked by the Fuel+ card every time it is used and also by the driver logging miles via a mobile phone app. Both make it much easier to assess use and any mileage that is out of the ordinary to flag up private or fraudulent use. Jackson says: “This side of Fuel+ means it offers cost savings way beyond any rebate offered by other card providers. “However, the savings continue, with Fuel+ being compliant for private fuel deductions, so the company is paying only
“[Fuel+] studies the detail to give a complete picture” Paul Jackson, managing director, The Miles Consultancy
25%
average business savings shown by fleets using Fuel+*
£3
monthly charge of Fuel+ per driver from TMC
Paul Jackson: savings come from a number of areas
for business miles and the driver can be accurately billed for private use. “We’ve found this also discourages improper use of a fleet vehicle when employees know they will have to pay for any non-business use. We’ve seen private fuel reimbursement increase by as much as 50%.” Company drivers benefit from Fuel+ being HMRC VATcompliant, so they don’t have to collect fuel receipts. Jackson says: “As Fuel+ goes beyond the normal VAT savings of other fuel cards, it gives an enhanced VAT reclaim, with clients reporting an average claim back of 40% more.”
ROUND-THE-CLOCK ACCESS TO DATA As well as the financial savings that come with Fuel+, Jackson says there are other advantages for fleet managers, such as TMC being able to offer daily alerts about the use of an individual vehicle. This data can be accessed at any time online through TMC’s system and it can be provided in a ‘dashboard’ display that suits the user’s preferences. TMC also provides a quarterly meeting between client and account manager. This lets it fine tune the system to a customer’s needs. Fuel+ also allows fleets to capture journey details and process expense payment. There is no lower limit for pre-approved spend by the card holder, so Fuel+ is able to spot irregular use promptly and TMC can alert the fleet manager. Jackson is proud of the security offered by the fuel card. He says: “Our first client went live with Fuel+ three years ago with a large fleet and in that time we have had only three queries come up. “Combined with Barclaycard’s guarantee against misuse of the card, Fuel+ is the perfect solution for fleets.” He adds: “It is much more versatile than other fuel cards because it uses Visa and chip and PIN technology. “This means it can be used throughout the European Union and it’s not tied to a single fuel provider, so there is no need for multiple fuel cards, which saves companies yet more expenditure.” Jackson concludes: “Fuel+ will adapt to technology so it can work from mobile phone apps even more than at present. “This will keep it at the forefront of the fuel card market, which has been stagnant for too long.”
* This is based on an average saving of 24.7% achieved by 24 TMC clients in 2012 ** If your first year saving doesn’t amount to double the TMC fee, TMC will make up the difference
In association with
Major fleets reduce costs and gain greater insight with Fuel+ Cost saving may be one of the initial appeals of the Barclaycard Fuel+ card, which is run in partnership with The Miles Consultancy (TMC). But there is much more to this new fuel card, which is what persuaded large fleets Manheim and Morrisons to switch providers
CASE STUDY: WENDY SMITH, FLEET ADIMISTRATOR, MANHEIM AUCTIONS “Cost saving is always welcome, but our main targets were to deter inaccurate claims, improve management information and eliminate reconciliation issues,” says Wendy Smith, fleet administrator for Manheim Auctions. “We were not initially looking for a new fuel card provider, but when TMC told us about Fuel+, we decided to make the switch. “As a people-focused organisation, it is important that any solution we introduce is easy to use for our employees. When we looked at the combination of Mileage Audit and the features of the Fuel+ card, it was a
CASE STUDY: BEVERLY HODSON, BENEFITS MANAGER, MORRISONS Supermarket Morrisons also wanted a better supply of management information on its vehicle fleet when it was looking for a new fuel card supplier. It was also keen to simplify its
straightforward decision to go with TMC and Barclaycard.” Before moving to the Fuel+ card, Manheim found reports were often incomplete or inaccessible due to system issues, while matching invoices took too long and was too complicated. Having made the switch, Smith is impressed with the way drivers now complete mileage returns on the TMC system each month and that TMC will remind any late reporters. She also points out that Fuel+ gives peace of mind for security as every purchase is authorised in real-time. Manheim has
“As a people-focused organisation, it is important that any solution we introduce is easy to use for our employees” Wendy Smith, Manheim Auctions
fuel expense process for the 2,500 colleagues who use fuel cards. Beverly Hodson, benefits manager at Morrisons, says: “Barclaycard Fuel+ has made a huge difference. “As well as the direct cost savings it has delivered, the visibility it gives us will help shape our policy. “No other solution offered us the same level of data. It has enabled us to get firmly on track with fuel cost management.” Hodson adds: “Simplicity is a big factor. It’s
“No other solution offered us the same level of data. It has enabled us to get firmly on track with fuel costs management” Beverly Hodson, Morrisons
chosen a Fuel+ system where the card can be used only at filling stations, which has put a stop to non-compliant spending and cash machine withdrawals. To answer Manheim’s desire for improved management information, TMC now sends a detailed report and analysis to line managers. This has made the company’s fleet management more efficient and saves the time of drivers and managers. It also saves time for administrators as the TMC system sends a salary reduction file to the fleet department, while also ensuring HMRC compliance.
easy for drivers to log into the TMC Mileage Capture system to report business journeys.” In addition, Morrisons drivers no longer have to keep VAT receipts, which greatly reduces the time spent by drivers collating them and reduces expenses administration. The TMC system calculates the VAT, personal fuel and benefit-in-kind tax data automatically, again saving time. On top of this, TMC prepares the private fuel deductions and delivers it to Morrisons in a payroll-ready file.