2008 will see new card products emerge in the small business sector as oil companies need to make their fuel cards more attractive to untapped business sectors. Many small businesses want a payment card that is widely accepted as well as offering fuel rebates and management facilities. A new report titled Commercial Credit Cards and the Response of Fuel Card Providers’, states that on this basis, bank-issued cards will become more focused on the provision of fuel management services, forcing oil companies to reconsider their proprietary fuel cards and maximise fuel sales through partnerships with these expert card providers.

As a large proportion of fleet operators already use fuel cards to make fuel payments, traditional oil company fuel card issuers are trying to find more innovative ways of tapping into the segments of the market that are less inclined to use them. The key untapped customer groups are smaller businesses, particularly sales-and service-orientated companies that only have a few vehicles.

A perceived disadvantage of traditional fuel cards is the fact that they can only be used for the purchase of fuel, service stations shop products and other specialist services such as breakdown recovery. Certain companies prefer to use a credit card as it can be used to pay for other business-related expenses such as hotel rooms or restaurants in addition to fuel.

Financial services providers have recognised this gap in the market and have launched commercial credit cards that offer a range of benefits including discounts on fuel and account management facilities. This is often a more desirable product for small-and medium-sized businesses, which will lead them to opt for cards that are part of the MasterCard or Visa schemes, resulting in the exclusion of traditional fuel cards.

The Tesco Business Credit Card in the UK, which uses the MasterCard program, is one example of a credit card that provides discounts on fuel. It offers a reduction of 2p on each litre of petrol and diesel purchased at Tesco service stations. Some European oil companies are also beginning to respond to the threat of credit cards by entering into partnerships with third parties and by introducing credit card functionality through membership in relevant programs. The Visa Repsol card in Spain, which offers a 2% discount on fuel, is one example

It is likely that 2008 will see the emergence of more of these multi-faceted fleet and credit card products issued by banks and independent fuel card companies. The oil companies offering proprietary cards as part of closed-loop programs must now prepare to enter partnership discussions that will ensure that their fuel retailing businesses maximise the benefits of this emerging trend in the cards landscape.

Further Reading: Commercial Credit Cards and the Response of Fuel Card Providers’