The trucking ecosystem has witnessed a high degree of technology proliferation across all segments within the industry recently, aided in part by advancements in machine learning and data analytics. The various technologies have been in a constant state of flux, and many in the trucking industry have been embracing them wholeheartedly.
Pursuing that line of thought, payment processes over the last few decades have seen an evolution that has been gradual yet incremental, with consumer behavior pushing companies to disrupt prevalent payment practices and put more innovative methods in place. FreightWaves spoke with Justin King, senior vice president of product and innovation of North America trucking for Comdata, to discuss the roadmap for payment solutions and the future of the system within the industry.
“In the 1950s, payments were completely cash-based. Fleet companies would send cash to the drivers through banks and Western Union. Drivers would use the money for things like maintenance, fuel expenses, motels and the like – making this a ‘high-friction’ process,” said King.
In 1971, when there was a strike at Western Union, Comdata’s founder realized the issue cash-based transactions caused within the industry. Comdata subsequently introduced Comchek, a document that resembles a physical paper check. The driver had to retrieve an express code via telephone, and the Comchek could then be cashed for the amount that the code had approved.
The checks later gave way to the fuel card system, which was mostly proprietary with different companies creating an acceptance network for their solutions. Fuel cards helped provide businesses a high level of control, security and also the possibility of tapping the data streams that came with every transaction.
“The security and control in fuel card systems helped prevent drivers from fueling more than they should and stopped people from defrauding their companies. The process was called the ‘network by card’ – the card could not be used until it was authorized by an onboard device or by making a call to the fleet manager who authorized the card’s usage for a certain number of gallons,” said King.
Consumer preferences also have a huge bearing on the evolution of fuel payment processes. For instance, Amazon’s advent and the rise of ecommerce have shortened freight hauling times by reducing the operational steps involved in transactions. King explained that the shift in business-to-business (B2B) behavior was largely based on consumer experiences, because at the end of the day, everyone in the industry were also consumers and thus they expected the same tools and frictionless experience everywhere – including at their workplace.
“We have gone a full circle now, with mobile applications being provided for employees who approve invoices. Ten years ago, we in the industry would have never thought this would have been possible – that employees would have a mobile app to get invoices approved after-hours and on weekends,” said King.
King mentioned that the future is about data, security and mobilization – all rolled into one. Big data is a reality, with data being captured across various mediums like ELDs, GPS systems, track-and-trace, and through sensors that monitor the 360-degree health of a truck while on the road. Fleets have to critically examine data within their reach, which can give them valuable insights on resource management and help them to increase operational efficiency.
“The focus needs to be on how we can better integrate data into the ecosystem, and bring real-time and actionable insights to customers using the data at hand,” said King. “We also can leverage the data to improve security. For example, if we know that a vehicle has driven X number of miles, we can calculate the fuel tank level, and based on that, we can estimate the number of gallons to be filled during the next transaction. Such control over data can prevent fraud.”
Comdata has developed a fraud analytics tool called Iris, which uses artificial intelligence to understand behavioral patterns behind fuel card usage and detect anomalous situations when they happen. For instance, if a fuel card is swiped in Tennessee, and it is then swiped again 10 minutes later in California, Iris would detect fraud and will either decline the transaction or freeze the card.
This apart, mobilization is critical – bringing in the mobile experience for financial transactions is something that both drivers and fleets expect in the era of e-commerce. Companies must realize, accept and use the desktop banking experience and functionalities of cell phones, and most importantly, design their systems in ways that are easily accessible to fleets and drivers alike.