According to NACS, transparency is the new cultural cool. Yep, we agree that transparency is the way to do business, but it’s nothing new to us. We conduct business with our customers with total transparency, and we’ve created a system that allows our petroleum marketers to do the same with their fueling customers. “Nearly five in 10 millennials say they return to brands they trust, according to a Concentric Marketing survey. Then, if they trust the product they bought and like it—more than eight in 10 say they’ll tell their friends about it […],” says the NACS article titled Crystal Clear.
According to an article recently written by Shane Dyer of Fuel Marketer News, fees have been increasing for many fleet card users due to fleet card processors buffering their pockets for the expected decline in fuel prices. Intevacon has maintained the same monthly access fee schedule since it was started in 2010. There are no additional interchange fees, site fees, or any other type of fee imposed on our customers to process transactions. Intevacon respects our customers, and we operate with integrity and transparency, regardless of fuel prices.
The way that Intevacon can help petroleum marketers enhance transparency is through the tools available in our system. Petroleum marketers are able to offer their fueling fleet customers with detailed reports, both on their invoices and through other special reports. Fleet customers have access to prompts that make transaction details clear as to which vehicle and driver was involved in a transaction, as well as odometer readings and product restrictions. What is more, online user access means that petroleum marketers can provide real time transaction information to their fleet customers, as well as the tools to update driver and vehicle information in real time.
When business owners are able to see clearly how their drivers are fueling their vehicles, they are more confident in their relationship with the petroleum marketer. “Instead of being scared by transparency, businesses should embrace it as way to improve service and increase customer loyalty,” says Entrepreneur.com in an article that also describes how employees are happier when businesses operate daily operations with transparency.
If you are looking to automate your house charges or switch fleet card providers, we’d love to talk to you about the Intevacon system at 678-739-4450 or email@example.com.
NACS recently published the 2016 Retail Fuels Report, and it is full of fun statistics highlighting our great industry. Intevacon is proud to work with so many hard working, smart business men and women who keep gasoline flowing around the nation.
Many of you already know the numbers reported below, whether it be through an intuitive hunch or an objective observation. Here are a few industry highlights noted by NACS:
Price Per Gallon
Over the last five years, the annual average retail mark-up was 19.7 cents per gallon.
On average, it costs a retailer 12-16 cents to sell a gallon of gasoline.
Over the last five years, the typical petroleum marketer averaged about 5 cents of profit per gallon of gasoline sold.
72% of consumers use plastic at the pump.
Credit card fees comprise about 2-3%, and up to 4%, of a total purchase.
Credit card transaction and bank processing costs continue to exceed convenience store profits.
The average gross margin on fuel has averaged 6.2% before other expenses are considered.
The average credit card fee is about 6 cents per gallon.
Most merchants only make a few cents per gallon in pre-tax profit, sometimes even losing money on a fuel purchase.
Price is the main consideration for 64% of customers who need fuel.
Gasoline purchases account for 4-5% of consumer spending.
Convenience Store Numbers
Convenience stores account for 34.2% of retail outlets in the US (according to Nielsen).
There are 124,374 convenience stores selling motor fuels in the United States.
There are more than 154,000 convenience stores across the US.
Major oil companies only own about 0.4% of the 124,374 US convenience stores.
In 2014, the industry reported profits of $10.4 billion and credit card fees of $11.4 billion.
Liability shifted to merchants in October 2015 who were not able to accept EMV cards.
Fuel island terminals are required to accept EMV cards by October 2017 to prevent liability.
The average cost per store to become EMV compliant is about $30,000, and the industry will pay more than $3.9 billion to move to EMV.
Intevacon has also had a big year. We partnered with a record number of new customers, growing our site count to over 2,200 across the US. We also started testing the Intevacon Fuels Network with select customers. In 2016, we plan to roll out the full capabilities of our network, implementing an “Everywhere, not Everybody” approach, as well as providing full ACH payment capabilities to allow our customers to streamline their accounts receivables process.
We hope 2015 was a good year for you as well, and we trust that you are also excited about a big year in 2016. If you would like to reach out to us to discuss automating your fleet cards or getting involved with our network, please call 678-739-4450 or email us a firstname.lastname@example.org.
Can you believe that trade show season is about to start again?! It’s been a big year for Intevacon, and we can’t wait to meet with our petroleum marketers to discuss the Intevacon Fuel Network. Come say hi at one of the shows below or give us a call to discuss how we plan to implement our “Everywhere, not Everybody” strategy for the network.
The convenience store industry continues to impress with its growing numbers of both locations and profits. NACS recently shared statistics in its article titled Up, Up and Awayabout the convenience store industry, highlighting the great year that we had in 2014, and showing promise for a strong 2015. Below are a few of the notable numbers from 2014:
Pre-tax profit surged 46.5% to $10.4 billion in 2014
Credit card companies took $11.4 billion, $1 billion more than profits
One in three brick and mortar retail establishments in the country is a convenience store
The industry store count is 152,794, a 1% climb from last year and a 28% increase from 2000
Fuel margin was 22.2 cents/gallon total
Fuel margin was 16.9 cents/gallon net card fees
Thank you, NACS, for always providing such great resources! The only statistic listed above that is not positive is the one involving credit card fees. Intevacon continues to help our customers hold onto their margins by eliminating credit card swipe fees with the Intevacon fleet card. We are proud to be part of the convenience store industry, and we love helping our petroleum marketers as they grow their fleet business with loyal, recurring customers. We’ve had a great year getting to know new customers, while also watching existing customers add new sites and new customer accounts. Intevacon has a lot in store for the remainder of 2015, and we are excited about BIG things!
Find out more about the Intevacon Fleet Card System by reaching out at 678-739-4450 or emailing email@example.com.
The Intevacon team just returned from a great week in Las Vegas at the NACS show. It is always rewarding to chat with our customers and hear how they love using our system. There is nothing like hearing compliments and referrals from our customers to keep us motivated and excited to continue growing and serving our customers and prospects. We have a very talented development team who works very hard to make the Intevacon system run smoothly and meet all of our customers’ needs.
Intevacon was founded in 2010, and in the last 4+ years, we have partnered with petroleum marketers across the country who have grown their fleet business with us and helped make us the best fleet card processor in the industry. A blog came out last week by Seth Godin describing the four stages of organizational growth: struggle, Servant, bully, and utility. Seth says that a business “can move to servant mode, delighting and connecting customers, exceeding expectations and performing what seems like miracles. Or it can take profits as soon as it can. The former leads to scale, the short-term approach usually results in more struggle.”
The Servant stage of business is exactly where Intevacon intends to stay as we grow with our marketers. We have big plans for 2015—plans to network our marketers across the nation, plans to help bring more volume to their sites, and plans to maintain strong relationships between the petroleum marketer and his cardholders.
Our business model is not necessarily the most conventional to turn a big profit, but we are satisfied with investing in the long-term growth of our business relationships. An article posted by PYMTS.com recently highlighted the fleet card industry stating that players in this field “charge vehicle fleet operators a subscription as well as transaction fees and they also get a piece of the transaction revenue from the gas station partners whenever anyone uses one of their cards to pay for fuel.” Intevacon just doesn’t operate that way, and we never will. We want to achieve our success by ensuring the success of our customers first.
To wrap up this blog post, here is a final quote by Seth Godin on organizational growth, “I’d like to believe that the goal is to figure out how to live a life in the servant stage, to create an organization that doesn’t become a bureaucratic haven or an avarice-focused engine of profit.” Amen.
Swipe fees recently made another public appearance in the news. Retailers have petitioned the high court to reconsider its March 2014 decision, which upheld debit card swipe fees at 21 cents per transaction as reasonable. This has been a hot topic for all retailers, with NACS being a large player representing the convenience store sector in this battle. Petroleum marketers want the limit lower than 21 cents for obvious reasons. Swipe fees—credit card and debit card—are reported as the second largest operating cost for petroleum marketers, just behind the cost of labor.1
The legal battle with swipe fees has been centered on the Dodd-Frank law passed in 2010 regarding debit card fees. The overall battle with swipe fees, however, encompasses more than just debit card swipe fees. Credit card fees were about 7 cents per gallon in 2011, averaging about 2% per transaction.1PayPal has an even higher rate starting at 2.9% plus $0.30 per transaction.2
Margins on petroleum in this industry are already small, so any percentage “swiped” by credit card processors has a big impact to petroleum marketer operations.Mastercard and Visa have been named in the current swipe fee lawsuit, but they are by no means the only card processors in the gouging game. Nearly three quarters of all transactions made at the pump are made with plastic—think about how that equates in total swipe fees.3
Intevacon is a proprietary card processorbut we offer more servicesto the petroleum marketer than the standard credit card company. More important to your bottom line, our pricing lets the petroleum marketer keep his/her margins. Convert one of your current Mastercard or Visa customers to a local house account and automate the process through Intevacon. We offer an online system that empowers the petroleum marketer with all of the controls needed to manage and grow his/her fleet accounts. We also provide the petroleum marketer an advantage to capture loyal fleet accounts by offering the option of online access to the cardholder. Intevacon succeeds when our customers succeed.
Converting cardholders who currently pay with a standard credit card or debit card to the Intevacon fleet card or prepaid card reaps huge savings every month. If a petroleum marketer converted $1.5 million of his current monthly business to the Intevacon fleet card, the savings from a standard credit card transaction fee of 2% would be approximately $340,200 a year or $1.36 million over four years. The higher the dollar volume on the Intevacon fleet card, the greater the savings from swipe fees. Supplement the fleet card with the prepaid card to get even higher returns and increase cash flow.
Swipe fees may be a necessary evil for a certain percentage of fueling customers, but there is a large cohort of cardholders who would benefit from the advantages of carrying a fleet card. Get to know your customer base and grow your business with Intevacon.