GOT GAS?N. Cvijanovic & G. Renfroe

NPS & Woodforest - NEW

Glossary of Terms

About the Petro niche

Why Sell Petro?

How to Sell Petro?

Sales Cycle

Interchange qualification

Compelling Questions

Conclusion

Intro/Outline

How is this relationship different from the high risk arrangement?

Learning ObjectivesWhat does the term Petroleum encompass?

What Fleet and Private Label cards are supported

What hardware and software is available to the petroleum market

What the target interchange rates are for petroleum and downgrades

What types of chargeback impact the petroleum industry

PetroleumTrends

Credit and debit card transactions accounted for approx. 70% of the c-stores’ total sales in 2006 according to NACS.

In 2010 owners reporting that 90% of c-store sales are paid by credit cards.

83% of gas stations in the U.S. have convenience stores

75% of the petroleum market is integrated; they accept both inside and pay-at-the pump sales.

GlossaryTermsof

5542 MCC assigned for Pay-at-the-Pump

5541 MCC assigned for C-Store Sales

AFD Automated Fueling Dispenser

C-Store

Convenience Store

CAT Card Activated Terminal

CRIND Card Reader in Dispenser

Dealer Doesn't own land or hardware yet receives c-store sales

DCR Dispenser Card Reader (aka card reader device)

DNS Data Network Systems

Fixed Wireless

Wireless communication method that does not require phone line but is not portable (e.g. internet transport, frame relay, VSAT, etc.)

WEX Wright Express

ISP Internet Service Provider

Jobber Multi-site company who owns land and hardware and also receives c-store sales.

Fleet Card

Commercial credit card that target the petroleum industry, which are typically used to purchase fuel, auto services, and supplies.

Fleet Cor

Company that distributes the Fuelman and Gascard fleet cards. Private Label Card: Commercial credit card that targets petro industry.

Private Label Card

Private Label Card - Commercial credit cards that target the petroleum industry, which are typically used to purchase fuel, auto services, and supplies.

P01 Ethanol85P02 DieselP03 Unleaded P04 Super Unleded P05 Other Fuel

Product Code

1-2 digit code that enables the issuer and/or major marketer to identify the good purchased or services performed at a particular site.

P06 Unleaded PlusP07 Gas/alcoholP08 Gas/AlcoholP09 Diesel

Product Code example:

Petroleum Market OwnershipMajor Oil Branded Location Ownership Structure

Corporate Owned <2%

Independent Owned

Dealer Location

BrandedBusinesses with a national footprint

UnbrandedBusinesses with a local or regional presence

Not on a national scale

IndustriesPetroleum and Non-gas

Petroleum• Establishment where fuel

is purchased• Requires prompting of

product codes for the purchase of goods and services

• Convenience stores and gas stations are examples of petroleum marketers

• Marinas• Airport Fuel• Snow Mobile Dealers

Locations where fuel is not purchased

Fleet cards are accepted

Often referred to as service merchants

i.e. Auto repair shops

Non-Gas

Resources

http://www.global-fleet.com/maintenance.asp

Why

Retention Niche Market

Profitability Low Maintenance

Impressive

Oil Company – Visa/MC/Disc –monthly $162,185Profits - $602 - 37 BP

Gas/C Store - Visa/MC/Disc – monthly $192,055Profits - $1128 - 58 BP

Marina - Visa/MC/Disc – monthly $253,878Profits - $837 - 33 BP

Profit

Roughly 8 retail merchants = 1 gas station

Rockin

Lack of competition

Fear of switching

POS compatibility

Cost of changing processors

Current processor termination fees

Retention

Minimal

The biggest hurdle is the setup process

Do your homework beforehand

Communicate the requirements to NPS

Look like an expert

Maintenance

HowSellto

Do your homework

Join trade associations

Establish a relationship with a pump vendor

Locate the Middleman (Jobbers or Petroleum Marketers)

Jobbers Who?Individuals or companies responsible for purchasing products directly from refining companies and reselling them to gas stations or other industry related businesses (i.e. home heating oil to homeowners, Jet fuel FBO, etc.)

Jobbers can be located through local gas station owners or petroleum marketers

associations, for example PMAA.

(Petroleum Marketers Association of America)

at the

Higher wholesale prices

Brand name competition

Fuel efficient cars

Wholesale clubsLower gas

consumptionHigher

interchange fees

SurvivingtheSales Cycle

of your time goes toward short sales cycle

30%of your time to larger accounts

(long term sales cycle)

Authorization Parameters

$1.00 authorization check

Interchange Qualification factors•Settled amount </= to $125 qualifies for best rate•Settled amount =/> $125 downgrades

Chargeback protection – Visa,MC, Disc - $125Amex $100 – suggested $100 cap

MCC 5542

Petro Interchange Rates Examples

42 1260 CPS Automated Fuel Dis DEBIT 0.91%+$0.1725

42 1284 CPS Service Station - DEBIT 0.91%+$0.1725

40 1284 CPS Service Stations 1.26%+$0.2725

52 1284 Petroleum DEBIT 0.81%+$0.1886

50 1284 Petroleum - Consumer Core 2.01%+$0.0186

55 1284 Consumer Rewards Petroleum 2.01%+$0.0186

Petroleum Buy Pass Pricing

Top Chargeback Reason Codes

88% Fraud Transaction

8% Non-receipt of requested item

1% Non-matching account number

2% No-authorization

1% Duplicate Processing

Hardware and SoftwareCC Machines – VX570 IP/dial

Software-Gilbarco, Excentus, Triversity, Datatran,Ruby, Radiant Systems, ETC……

Compellingquestions

What hardware/software do you currently use?

What type of communication method are you currently using?

What type of pumps/dispensers do you currently use?

Do you currently accept debit?

What bankcards are you currently accepting?

What entitlement or fleet cards are you currently accepting?

Why

It’s Intimidating

Less competition

Higher Retention

= =

All summed up

Ching

Thank