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Monday, July 22, 2024

Fuel Vouchers: A Versatile Digital Currency for Efficient Fleet Management, Marketing, and Loyalty

As consumers and businesses become more comfortable with transacting in and using digital currencies, we see the use of vouchers grow. Vouchers have always been a popular gift market, but now, they are being used as another form of currency by businesses and loyalty programmes. The use cases have also exploded; we aren’t just talking about food or spa vouchers; we are starting to see companies use vouchers for essential items like fuel.

If we look at the global market for gift cards, which are often used similarly to vouchers, it is expected to reach $606.9 billion by 2031. Then, the global mobile coupon industry, which includes digital vouchers, was valued at $509.7 billion in 2022 and is projected to grow to approximately $1.6 trillion by 2030. In the U.S., the use of digital coupons is significant, with 337 million digital coupons redeemed in 2021 alone.

The data suggests a growing preference for vouchers, driven by convenience, ease of use, and the increasing digitalisation of commerce and consumer behaviour. Locally, the use of fuel vouchers is just another way to allow businesses to get on top of fraud, automate and streamline otherwise manually intensive tasks, and embrace the idea of the virtual wallet.

For Partnership Campaigns – Fuel as a Marketing and Convenience Currency

Fuel vouchers enable partners to extend their offerings beyond the “traditional voucher” service. One compelling use case is in marketing programmes. Companies such as Mobile Operators, Insurance Companies or anyone with large membership-based networks can partner with fuel voucher providers to purchase vouchers in bulk and distribute them through customer loyalty programmes.

What we are doing at Payment24 is working with leading partners who are doing just that: they buy fuel vouchers from us in bulk, and their customers can exchange their loyalty points for these fuel vouchers via their loyalty programme—adding substantial value to these programmes. These vouchers are also being used as staff incentives.

Given that fuel is a major expense for many consumers, the ability to convert loyalty points into fuel vouchers makes these programmes more attractive and practical, enhancing customer satisfaction and engagement.

Auto dealerships also find fuel vouchers particularly advantageous. Traditionally, dealerships faced challenges with a high turnover of fuel cards and the cumbersome process of manually managing refuelling demo and fleet cars every month. By issuing fuel vouchers via a digital portal or app, dealerships can streamline their operations. Drivers can easily refuel at participating stations, and the system provides real-time transaction tracking and comprehensive oversight. This automation simplifies monthly reconciliations and ensures efficient fleet management, as it completely nullifies the need for service station accounts and the issuing of fuel receipts each time a vehicle needs to be refuelled.

Moreover, various businesses, including insurance companies and digital retailers, are increasingly adopting fuel vouchers as an incentive-linked value-add. Companies which traditionally sell products like airtime, electricity, and other digital vouchers are now incorporating fuel vouchers into their line-up. This addition caters to the high demand for fuel as a necessary and valuable commodity and acknowledges the burden of rising fuel costs on the consumer wallet.

Fuel Vouchers for Fleets

Fuel vouchers offer a compelling solution for fleet owners looking to streamline their fuel management processes and reduce the administrative burden. Traditional methods, such as issuing fuel cards, still have a place, but they can come with challenges like card loss, misuse, and the need for constant monitoring and replacement. Fuel vouchers, however, provide a flexible and efficient alternative. By issuing digital vouchers directly to drivers’ mobile numbers, fleet managers can ensure fuel expenses are controlled and tracked in real-time. This minimises the risk of fraud and eliminates the hassle of managing physical cards.

Moreover, fuel vouchers bring significant cost-saving benefits. For ad hoc drivers or temporary hires, issuing a new fuel card for short-term use is impractical and costly. Instead, companies can distribute fuel vouchers as needed, which can be easily managed and revoked if necessary. This pay-as-you-go system ensures fuel expenses are closely aligned with actual usage, reducing waste and ensuring better budget management. Additionally, any unused balance on a voucher can be automatically converted into a new voucher, ensuring that no funds are wasted and providing continuous value until the voucher is fully redeemed or expired.

Another key advantage of fuel vouchers is their integration with existing digital ecosystems. These vouchers can be used at numerous participating service stations, making them highly convenient for drivers who can refuel without needing a specific card or tag. The real-time transaction data provided by fuel vouchers also offers fleet managers comprehensive oversight of fuel consumption and spending patterns, enabling more accurate reporting and analysis. This level of transparency and control is invaluable for optimising fleet operations and making informed decisions about fuel procurement and usage.

Purchasing and Transacting with Fuel Vouchers

Fuel vouchers are delivered through strategic partnerships between voucher providers and fuel companies. These partnerships are essential to ensure that the vouchers are widely accepted across a network of service stations, providing convenience and flexibility to the users. When a company decides to use fuel vouchers, it can integrate this system into its existing operations (if its system supports it). It can also purchase vouchers in bulk from a company like Payment24, which has established partnerships with over 1000 participating fuel service stations.

Vouchers are issued digitally, often through a secure portal, and can be delivered directly to the recipient’s mobile phone via SMS or WhatsApp. This method ensures that the vouchers are accessible and easy to use without the need for additional apps or complex procedures. That said, apps can also simplify the process if a company wants to add fuel vouchers to an app.

Once issued, fuel vouchers act like a digital wallet. The recipient can use the voucher at any participating service station within the provider’s network. If the value of the voucher is not fully used in one transaction, the remaining balance can be converted into a new voucher until the balance is depleted. This is particularly useful for businesses with fluctuating fuel needs, such as those hiring ad hoc drivers.

The Fuel Voucher Currency

In summary, fuel vouchers provide a flexible and efficient payment method that simplifies fuel management, reduces administrative burdens, and minimises the risk of fraud. Fuel vouchers also enhance loyalty programmes by allowing customers to convert points into products they need, driving customer satisfaction and engagement.

Additionally, the seamless integration and real-time oversight provided by digital fuel vouchers ensure businesses can optimise their operations and better manage their fuel expenses. These advantages make fuel vouchers an innovative and practical choice for companies looking to improve efficiency and add value to their offerings.

By Shadab Rahil, Joint CEO at Payment24

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