Why Your Fleet Management Company Needs to Start Embedding Payments

Nov 2, 2023
Parker Pierce

The logistics and fleet management industry is undergoing one of the most dramatic digital transformations of any industry. This shift, driven by the surge in digital commerce and last-mile delivery, is prompting digital SaaS enterprises and startups to revolutionize every aspect of fleet management, from Electronic Logging Device (ELD) tracking to Enterprise Resource Planning (ERP). If you’re part of the innovative cohort disrupting this space, you may have come across an intriguing way to add unprecedented value to your core offerings: integrating embedded payments into your solutions.

But why does it make sense to embed payments into what you do? And why now? And how can you be sure adding payments won’t take your team’s time and resources away from your core business? Let’s explore.

The Pre-Digital Era of Fuel Payments

In earlier decades, fleet companies realized they could not simply give a handful of cash to a driver to spend on fuel; it was too prone to security risk and damage. Fleet managers also realized they could not just buy gift cards and hand them out to drivers either. The process was inefficient, costly, and a veritable black box of data. Enter what we’ll call Fleet Cards 1.0 -- fuel cards meant to offer the convenience of cash with the security of a credit card.

To achieve this balance, the Fleet Card 1.0 companies created “closed-loop” cards. The cards could be issued in bulk and came with specific spend controls, such as only working at specific fuel brand locations or toward specific merchandise. The solution was good enough at the time, and a handful of Fleet Card 1.0 companies grew to manage the fuel payments for nearly every fleet company in the US.

The Rise of New Technology

While the earlier fleet payment cards worked initially, they were created in the era before most of the payment innovations we have access to today: mobile payments, digital wallets, and integrated APIs, to name a few. To many fleet companies, closed-loop cards have begun to look like a low-tech headache, unable to confront the new challenges of the mobile age.

Legacy providers often struggle to adapt to newer technology paradigms, and fleet is no different. Transitioning closed-loop cards with little flexibility into open-loop cards with dynamic spend controls and connected API interfaces is an arduous technical task that can leave solutions feeling clunky and disjointed. Many fleet companies would switch card providers if they could, but often, the status quo feels safer than trying out something new.

The legacy fleet card malaise opens up a critical opportunity for fleet management companies that does not exist at the same level in perhaps any other industry. If forward-thinking fleet management companies partner with a similarly modern card platform provider, they can embed payments into their existing business relationship with their customers and extend their brand into a crucial customer touchpoint while generating even greater revenue from a new offering.

For example, a fleet management information system (FMIS) provider can offer a branded card to their current fleet customers to use for fuel and maintenance purchases. The FMIS provider can then tie rich business expense transaction data to the deep fleet asset insight at which they already excel. The combination of the original service, fleet asset management, with the addition of payment capability, streamlines and modernizes operations and justifies the investment and ongoing relationship a fleet company has with the FMIS provider.

Why Highnote is the Embedded Payments Partner of Choice for Fleet Management Companies

By now, you are likely seeing a common theme. The fleet payment cards of earlier years were built for one purpose using one form of technology. That simplicity works, until it doesn’t.

Highnote built our platform on an entirely different framework from these earlier payment cards. Where the earlier generation offered singular use cases with simple controls, Highnote anticipated all possible use cases. Our open-loop, flexible design does not limit companies to fuel payments. Instead, dynamic spend controls allow you to enable specific permissions depending on each of your customers’ unique business needs.

To illustrate with an example: consider that a fleet company customer of yours wants to allow food and drink spending on fuel cards for its last-mile delivery vans but prohibit non-fuel purchases for long-haul vehicles. Additionally, the long haul vehicles must withdraw cash to pay lumper fees during their shift, but the last-mile delivery van drivers do not need ATM access. With a payment card from the 1.0 era, such varied spend controls would be impossible. You would need to issue separate cards: one for fuel and one for food/ATM access.

With Highnote, all the aforementioned transactions can be made easily from one issued card, with the spend controls simply turned on and off based on the parameters you set.

Many other features make Highnote a compelling partner for fleet management companies beyond the Fleet Card 1.0 era and even beyond other current card issuers. These include:

- Direct Connection to the Payment Networks: We have the rare distinction of being fleet card certified on both the Visa and Mastercard Fleet programs. Our payment network relationships not only mean near universal acceptance but also ensure we can provide the best-fit cardholder experience for each of your fleet customers.

- Enhanced Data: While plenty of payment cards offer transaction data, most of this only goes down to what we’d call level 1 or level 2 data, which typically only includes the most basic purchasing card information required for clearing and settling. Thanks to our bare metal connection to the payment rails (Visa and Mastercard), Highnote can offer all the way down to level 3 data, meaning visibility into areas like quantities, product codes, product descriptions, and units of measure.

- White Glove Service Level Program Management: You might be concerned that embedding payments into your business flow will cause unwelcome disruption. Who manages the program? Will you have to work with a bank? What laws do you need to be sure you’re following to accept payments? Highnote manages all of the challenging aspects of card program management, from compliance to bank relationship management to partnership agreements. This takes all the work of managing the actual card off of your shoulders, so you can reap the benefits of embedding payments without navigating any of the trickier aspects.

Unlocking the Future of Fleet Management: The Power of Embedded Payments

Inventive fleet management companies have an unprecedented opportunity to revolutionize their relationships with customers. With the Fleet Card 1.0 era behind us, the stage has never been better set for innovators to use embedded payments to generate greater customer loyalty and revenue. Partnering with cutting-edge payment platform providers like Highnote empowers fleet management companies to offer dynamic spend controls, direct connections to payment networks, and enhanced data insights, all while maintaining a seamless customer experience.

If you are an innovator and looking to be a leader in the fleet management space, talk to us about how you can embed payments into your core offering and become part of the future.

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