Keeping Payments In Mind When Disrupting The Fleet Industry

So, you’ve got a disruptive, emerging technology. Now what? In fleet, getting that technology off the ground needs to include a frictionless payments mechanism to make the transition from legacy technology easier.

That’s exactly what’s happening in the electronic vehicle (EV) industry today. EV is perhaps one of the few disruptive technologies taking off among corporates more so than consumers. But having an electronic vehicle fleet means overhauling the way managers and drivers pay for fueling; after all, these vehicles no longer have the option of fueling up at retail gas stations with traditional POS terminals.

ChargePoint is not a FinTech company. The firm provides electronic vehicle charging stations for consumers and businesses; anyone with a parking lot, practically, can acquire an EV charging station.

But fleet companies were some of the firm’s earliest clients, according to Head of Fleet Business Development David Peterson. He and his colleague, Jim Solomon, senior director of product management, told PYMNTS about their strategy to meet the payments needs of their fleet clients as EV technology gains more interest in the corporate space.

“There was no model for how electronic vehicle fueling was going to proceed,” Solomon said, referencing the start of his time at ChargePoint nearly a decade ago (ChargePoint was founded in 2007).

But, with corporate fleets signing on to adopt electronic vehicle fleets, ChargePoint had to map out a charging strategy. Today, that map includes four scenarios for fleet, Solomon explained: charging stations owned by the corporation dedicated to its fleet, mixed-use stations for fleet vehicles and for the personal vehicles of corporate employees, charging stations at private residences for when a fleet vehicle must be taken home, and stations for drivers that need to recharge while on-the-go.

By nature, this dynamic created interesting logistical challenges when it came to paying for the fuel.

Charging station owners can decide who can use the fuel station and for how much. For fleet drivers and their managers, that can pose a problem if a fleet driver is out on the job and unsure of where to charge up.

ChargePoint introduced a fleet card program earlier this month to solve that problem.

“We spent a lot of time here thinking and talking to fleet managers about what they want and what we can do to move the market forward,” Peterson said, adding that the biggest pain point for fleet clients is, once they have their own fueling stations, how a driver can recharge while on the road when their company charging stations aren’t readily available.

“They realize that, every once in a while, their vehicle … will need a charge to get back home,” Peterson continued.

ChargePoint decided to arm their fleet clients with RFID cards, contactless technology that can identify the location and driver associated with the payment at various fuel stations.

According to Solomon, the technology associated with electronic vehicle charging stations made traditional mag-stripe cards a non-ideal solution to on-the-go payments for fleet drivers.

“EV chargers often live in unattended areas and, therefore, have to be as close to zero maintenance as possible,” he explained. “Chip-and-PIN magnetic stripe readers require maintenance, and therefore, the EV charging industry has converged around RFID technology.”

RFID cards mean there is no maintenance — like cleaning off a POS or user assistance — needed.

Like other fleet players, the firm had integrated telematics solutions into its card tool, allowing for automated odometer readings and added fraud prevention methods.

Telematics have become a must-have for fleet payments technology as fuel fraud and similar fleet-related crime rises. A recent report from Shell, for instance, found that nearly two-thirds of fleet managers in the U.K. market cited fuel fraud as a top concern.

More than a quarter of fleet professionals surveyed admitted they had seen a coworker engage in fraudulent activity, too.

“Because fuel is such a valuable resource, it will always attract criminal behavior,” said Shell U.K. Commercial Fleet Sales Manager Scott McGregor when the research was released last week.

While gas siphoning is no longer an issue with electronic vehicle fleets, there can be issues of unauthorized use of a charging station, while fleet managers will continue to need insight into where their drivers are and how they’re spending corporate funds.

ChargePoint’s introduction of a fleet card solution represents the need for ease of payment when gaining traction among corporate users of a disruptive technology like EV.

But the firm’s fuel card solution doesn’t necessarily mean fleet managers can pay for charge time with an electronic payment technology. Solomon explained that, once a month, fleet managers are sent an invoice that outlines the fleet card spend for that billing cycle. That invoice is then paid for by ACH or paper check, he explained. Spend on the RFID card can also automatically be charged to a PayPal account or credit card for smaller fleets.

The dependence on monthly invoices may not be ideal for fleet managers — let alone making the decision to entirely overhaul a gasoline fleet to electronic. But the impact on the bottom line for fleet managers is attractive, Solomon said.

On top of the added value of providing an image of sustainability to a corporation, the savings from electronic fuel cancel out the higher costs of procuring electronic vehicles, compared to gas ones, the executive added. “The economics alone add to the allure of the fleet manager,” he said.

According to both Solomon and Peterson, fleets were some of the earliest adopters of ChargePoint’s offerings, and today, they have some massive fleets on their clientele list. Adding a fleet payments solution, Peterson said, is likely to help propel corporate adoption of their tool.

But the rising sophistication of fleet cards — from telematics integration to automatic spend analysis and fraud detection — will likely mean fleet managers will demand more sophisticated payment solutions from emerging technologies like electronic vehicles. The launch of the RFID card suggests these disruptive technology developers, like ChargePoint, are listening to corporates’ payments needs.