Innovations ignite competition among fleet card providers

U.S. fuel cards were a relatively complacent niche until a few years ago, when a wave of consolidations and digital innovations transformed the $66 billion-plus industry into a hotbed of competition.

The wheels began turning about four years ago when longtime fleet card provider Wright Express bought Fleet One and rebranded itself as WEX Inc., beginning a broad expansion of digital payments capabilities that key industry rivals Comdata Inc. and U.S. Bank echoed. U.S. Bank for years has served vehicle fleets with its Voyager fuel card network.

Fuel card providers developed new platforms to more easily manage card controls and expense management, and deployed mobile apps to help drivers more easily locate outlets that accept fuel cards.

“A lot of innovation has sprung up in fuel cards in recent years and suddenly it’s an extraordinarily competitive marketplace,” said Greg Secord, president of Comdata’s North American Trucking division, based in Brentwood, Tenn.

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All major fleet card providers are expanding serve a diverse mix of fleets of small, midsize and large vehicles with distinctly different needs.

FleetCor paid $3.45 billion in 2014 for Comdata, the longtime market leader in private-label fuel cards for large companies operating the biggest trucks hauling loads across the U.S.

WEX responded to that move a year ago, paying $1.1 billion to Electronic Funds Source LLC, a fleet card solutions provider focused on the same larger, long-haul trucking firms.

U.S. Bank—while a smaller contender in the overall market—countered with its own move to capture more business from fleets with all sizes of vehicles. Earlier this year U.S. Bank rolled out the Single Voyager Fleet Card Solution, which the company said is the first product to cover fuel purchases for all eight classes of fleet vehicles—from small cars to the largest trucks—in a single card.

Now Comdata, which has long served bigger companies operating large trucks, has decided to expand its services to smaller companies in that same niche. Smaller trucking firms operating 1-100 large trucks account for the vast majority of all big trucks on the road, Secord said.

Comdata this month rolled out MyFleet, a new fuel card program that includes a digital platform with a mobile app. It has negotiated fuel discounts at many providers and discounts from Comdata’s other industry partners including CRC Lodging and Crestmark Bank, which provides a link to get additional credit.

“The vast majority of our customers are larger companies, but it’s become clear the smaller companies that have more trucks altogether lack a lot of the tools we can provide for controlling and managing fuel and other expenses,” Secord said.

One of the biggest challenges smaller companies face is the need to manage fuel taxes as they travel across state lines, and MyFleet handles this task automatically with each fuel purchase.

“Most truck drivers jam their fuel receipts into a big paper envelope, which creates a huge amount of paperwork, not to mention it’s hard to stay accurate that way,” Secord noted.

Comdata devised MyFleet after conducting a broad survey of 500 smaller trucking firms, and the company plans to continue adding features over the next year.