Fintech Companies Offer Options for Drivers and Truckstop and Travel Plaza Operators

Today’s customers want choice in all things, from the products they buy to how they pay for them, and thousands of drivers and fleets are turning to alternative payment methods for fuel.

Several new fintech companies have entered the fuel payment arena, giving owners and operators access to discounts they haven’t had access to before.

The companies can also offer truckstop and travel plaza operators additional gallons, lower interchange fees and increased foot traffic.

Jeremie Myhren, co-founder of ONRAMP, a fuel payment solution, said today’s trucking industry is evolving rapidly, and in many ways is dramatically different than it was even ten years ago, which is creating new opportunities. “Changes brought on by last-mile fulfillment models, third party logistics companies and freight technology companies that were already underway prior to the pandemic accelerated to NASCAR speeds as the pandemic stretched into 2020,” he said.

While enterprise fleets with company drivers remain a large part of overall diesel consumption at travel centers, many drivers today either own their own business or are an extension of a freight technology provider, Myhren said. Overall, everybody is looking for a frictionless payment experience today. “The paradigm of a plastic card is ending. The card, by its nature, lacks intelligence and is offline,” he said. “Point-of-sale integrated solutions that enable the driver to consummate a software powered transaction is the goal today.”

Critical Considerations for Fintech Partnerships
While fintech companies are bringing some positive changes for many NATSO members, there may be some downsides for operators. Here are four key considerations:

Fintech Companies are Significantly Impacting Posted Diesel Street Prices: Owner-operators are a critical customer base for independent operators, and now owner operators are able to get full transparency from a retail standpoint and no longer look at the street price, said Darren Schulte, NATSO’s vice president of membership. That means many independents are having to reduce their margins to stay competitive.

Some Truckstop Partners Don’t Care About Margins: For many of fintech truckstop partners, the goal is new gallons. “They don’t care if it is a five-cent or a ten-cent margin. It is all new to them, and they’re putting a lot of pressure on the independents,” Schulte said, adding that independent operators are going to have to focus on their operating costs.

It May Lead to Simply Trading Gallons: If a location discounts gallons to hold onto them or even grow them, they may not see a benefit. For example, if a location is doing 100,000 gallons a month and a new partnership grows their gallons by an additional 10,000 gallons but they gave up profitability on existing gallons, a breakeven may not even be possible. “You may realize you made less money at the end of the month and didn’t sell enough additional gallons to offset what you traded away,” Schulte said.

Fintech is Closely Tied to OPIS: Some fintech companies are closely tied to OPIS metrics. Operators who don’t have a strong understanding of OPIS and how OPIS data feeds work or who don’t closely compare their true cost to what OPIS lists as the cost, it could be a risky or costly situation.

Disruption in the Fleet Card Space
Despite the potential downside, several NATSO members see benefits. 

“The fleet card space has been controlled by a small few, whether it is Visa or the tech startups. They’ve seen perhaps they have had it easy for a while and it is time to have that new offer out there. That disruption is bringing new opportunity,” said Tony Spuzello, director of commercial fuels for Casey’s General Stores. “They are finding success bringing new cards to the table.” (Listen to Casey’s Grows Its Fleet Fuel Card Offerings here.)

Casey’s General Stores has partnered with several new payment options, including Mudflap, an app that provides instant diesel discounts, AtoB, a fintech startup fuel card powered by Visa, and Coast, another new fintech player. All of the providers offer drivers a discount on fuel.

Focusing on fuel cards has been a major project over the last three to four years for Casey’s. “We’ve been talking to folks that get a discount elsewhere and let them know Casey’s can compete today and to think of us as a partner,” Spuzello said. “We have stores across the street from major travel center competitors and, because we didn’t have a discount, we weren’t playing in the same game.”

Fuel Card Discounts Expands Your Customers Base
“Independent truck drivers are making up the majority of the new payment users, and that is where the independent operators live,” said Schulte.

Kum & Go has also signed on with AtoB for its 400 stores. Through the partnership, AtoB card holders will automatically receive a discount of ten cents off every gallon of gasoline and diesel purchased. “Kum & Go is always looking for ways to innovate and provide the best experience for our customers,” said Brad Petersen, director of retail fuels at Kum & Go.

Casey’s General Stores wants to accept any form of payment. “The more you cast, the more fish you can hopefully bring in. You can offer a discount to win their business,” Spuzello said. “To me, a modest discount to customers who may not get a discount otherwise may attract a base that maybe today isn’t shopping at Casey’s but, with a financial incentive, will come into our stores.”

Spuzello said there are different segments of the industry that choose a fuel card. “Maybe they don’t like Casey’s card offer or Comdata’s card offer for whatever reason. The fuel card will pull a consumer or company in to use their card because of a portal or an accounting tie in. There is something that makes it sticky and perhaps I’m not getting that business because the other cards don’t have that. Or they started in an area where we didn’t have the geography,” he explained.

Marion Travel Plaza has partnered with Mudflap, which provides instant diesel discounts at more than 1,200 truckstops and travel plazas nationwide. On its website, Mudflap said the average savings is 40 cents per gallon.

Malik Yousif, president of Marion Travel Plaza, said Mudflap’s entrance into the market is helpful to both operators and drivers especially with the increased cost of fuel and equipment and higher interest rates. “Now more than ever a few extra pennies means something. The environment is very conducive to people pinching pennies,” he said. “If you’re an owner operator who doesn’t have access to a lot of cost-plus discounting, you’re in a tough position and might even shut down.”

At the same time, independent operators are dealing with higher labor and material costs as well as a looming recession. “Being independent, we’re dealing with so many things. We’re facing higher costs and lower margins,” Yousif said, adding that transaction fees are a challenge for truckstop and travel plaza operators. “Mudflap solved a pain point because they can get us our money faster. I have to wait 7-10 business days on my fleet card. I’m willing to give a larger discount to these smaller operations because I’m paying less money because of the transaction fee and it is cash in my pocket.”

Growing Gallons
Tyler Raugh, head of business development and strategic sales for AtoB, said partnering with the card can drive incremental volume to  truckstops and travel plazas through its various marketing mechanisms. AtoB launched its fuel card in March 2021 and now has about 100,000 drivers using the card. “Our discount network is strong and growing as we’re partnering with additional truckstops. I would describe the benefits as three-fold—cost, convenience and control,” Raugh said.

AtoB works with its partner to establish a baseline. “We look at what type of activity they’ve had in the same month and what kind of activity they’ve had in the same vicinity and put together a program to offer a discount to our customers,” Raugh said, adding that AtoB helps promote locations with drivers.

AtoB has an extensive group of phone numbers for truck drivers and can text location-based discounts. “We have a driver app, so we display prices at truckstops,” Raugh said. “If there are special programs, we can display that and push notify drivers on that.”

At the fleet manager level, AtoB utilizes email marketing and has a dashboard that fleet managers use to manage their fuel expenses for the fleet. “There are various ways to get the word out and drive incremental business,” Raugh said.

Attract Smaller Fleets
For Spuzello, one of the top benefits is in how the providers are aggregating smaller fleets on locations’ behalf. “These different fintech groups are focused on a five to 100 vehicle fleet. There is still a pretty big barrier to break into the Swift Knight size fleets. New groups are focusing on smaller owner operators that haven’t had the buying power,” he said. “As Casey’s, with one fuel rep in the field, we can’t go out and work with these smaller fleets.”

Offering a Branded Fuel Card
A to B is also partnering with independent truckstops to power their branded fuel card. “Roady’s was the first truckstop that issued its fuel card powered by AtoB, and we’re doing this with several other independents. It is a good way to drive loyalty,” Raugh said, adding that the AtoB card has an integrated rewards experience. “Drivers get Roady’s re- wards, get a discount on fuel and the fuel merchant gets a share. They get a benefit of some additional margins.”

Providing a Mobile App
The free Mudflap app launched in January 2020 and now has 500,000 who use it to save on fuel, said Sanjay Desai, CEO and founder of Mudflap. “This is now a mobile app that more than half a million truck drivers are looking at every day to make a decision around where to fuel. The opportunity to appear on that map when they are making that decision is a really valuable one,” he said.

Desai said Mudflap expected younger drivers to use the app. “Our question was would veteran drivers? Thankfully, they’ve also shown that they are, and the app is built to be super simple,” he said. “The drivers in their 60s and 70s are using it.”

A lot of word-of-mouth advertising happens right at the pump to fellow drivers that are fueling. “He introduces it and the driver can start using it that visit,” Desai said. “It is a free mobile app download. On the driver side, you just add a payment method—a debit or credit card or their bank account.”

Mudflap’s fuel network is made up of larger locations, including Casey’s, RoadRanger and Maverik, as well as hundreds of independents. “We literally have hundreds and hundreds of mom and pops. Our total network is now over 1,200 locations coast to coast and we’re continuing to add more every day,” he said. Mudflap targets own- er-operators and small carriers with one to ten trucks.

The instant value proposition resonates with drivers, Desai explained. “We’ve been fortunate. Since launch, the No. 1 driver behind our growth on the trucker side has been word of mouth. It has been current customers telling fleet mates and fellow owner operators about it,” he said.

Yousif said Mudflap is helping him capture new customers. “I probably do an average of 5,000 to 6,000 gallons a day with Mudflap,” he said, adding that he appreciates the transparency the app provides. “I know exactly how much the truck driver is paying and how much I’m paying. It is a lot of transparency in an industry that is littered with very big players who are gobbling up as much margin as they can.”

In addition to growing gallons, several fintech providers said they can help drivers and operators cut costs.

// Created for Stop Watch magazine, the magazine of the NATSO Foundation. The NATSO Foundation is the research, education and public outreach subsidiary of NATSO, Inc. The NATSO Foundation provides programs and products aimed at strengthening travel plazas’ ability to meet the needs of the traveling public through improved operational performance and business planning. Visit www.natsofoundation.org for more information. (Donate to the NATSO Foundation here.)