ExxonMobil Corp. has expanded its contactless fueling options by joining the Car IQ Inc. payment network for fleet vehicles. Car IQ allows fleet companies to use its mobile payment platform to more efficiently buy fuel and other services.

Car IQ Pay, which works with Visa Fleet, is accepted at more than 12,000 Exxon and Mobil stations. Its services focus on fueling large and small truck fleets, available at more than 8,200 locations with retail diesel pumps and another 800 with commercial truck diesel pumps.

ExxonMobil has been growing within this space for some time now. In 2020, the company announced that it had introduced a dual function pay option via NFC (near field communication) or a QR code. That technology allows a driver to transact fuel payments through a smartphone.

ExxonMobil also teamed up with Fiserv to initiate gasoline payments through Alexa and Amazon Pay. For vehicles equipped with Alexa, drivers can give voice commands to select a gas station pump and authorize a payment. The “Alexa, pay for gas” program went live in September 2020. In addition, Android and iOS users can scan a QR code or tap their device to the Google Pay tag at ExxonMobil stations.

Challenges for Car IQ

The alliance with Car IQ Pay is a logical extension of this strategy. With Car IQ Pay, fleet members can connect their vehicle directly to the pump without needing a credit card, PIN number or vehicle odometer reading. As the Car IQ website describes, the payment app uses vehicle data to create a unique ID that connects directly to the merchant to initiate transactions. The Car IQ wallet adds vehicle data to the transaction, enabling merchants to provide real-time offers and personalized rewards for fleet operators and drivers.

Analysts say that while Car IQ has done a good job of expanding its network, it still has a long way to go to compete with major credit card issuers.

“In order to compete with the major providers, Car IQ will need to continue to expand its acceptance network,” said Ben Danner, Senior Analyst of Credit & Commercial at Javelin Strategy & Research. “Bringing on titans like ExxonMobil is a great addition and will give drivers the added flexibility of contactless payments with a big opportunity to reduce fraud and disputes. However, traditional fleet cards have significant rewards perks and rebates, which may be enough to keep fleets from ditching their plastic cards.” 

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BankMobile remains the largest provider of Title IV funds disbursement services under T1 arrangements with colleges, according to a new report from the Consumer Financial Protection Bureau (CFPB). BankMobile had approximately 750 university partners as of 2021, and more than $13 billion in disbursements that year. Colleges paid BankMobile more than $3 million for the 2021-2022 award year, with an average payment amounting to $8,155.

In T1 arrangements, colleges typically pay a provider to process federal financial aid disbursements. Payments typically include subscription fees, monthly account maintenance fees per user, and fees per disbursement.

In the 2021-2022 award year, financial institutions generated more than $15 million in fees from these accounts, with accountholders paying an annual average of $26.50 in fees. BankMobile, the dominant player, charged higher-than-average fees, at more than $28 per accountholder. Huntington Bank had the lowest annual fees, averaging less than $2 per accountholder.

BankMobile is a fairly recent entry into this space. It began as a subsidiary of Customers’ Bank in 2015 before acquiring former-T1 services provider Higher One the following year. By 2021, BankMobile estimated that it had access to one in three college students in the U.S. through its campus partnerships.

Credit Card Partnerships

This was the 12th annual CFPB report to Congress on college banking agreements, which is mandated by the CARD Act of 2009. Among the highlights in this year’s study:

• In 2022, credit card issuers paid nearly $20 million to colleges and affiliated organizations for partnerships. The average annual payment was roughly $138,000.
  
  
• The CFPB’s review identified 143 partnerships between colleges or affiliated groups such as alumni associations and credit card issuers. This market is dominated by the alumni associations, who make up more than two out of three of all college card accounts.

• During the 2021-2022 award year, financial institutions generated over $17.3 million in revenue from more than 650,000 student bank accounts.

• The amount of fees charged to students annually varies by institution type, Accountholders at Historically Black Colleges and Universities, for-profit colleges, and Hispanic-servicing institutions end up paying higher-than-average fees per account than other schools.

• Credit card marketing practices no longer rely as heavily on in-person marketing as they did when the CARD Act was passed in 2009. 

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Goldman Sachs, which has been working to get out of the credit card business, appears to be ending its co-branded credit card and savings account with Apple. Apple says it is still committed to its Apple Card business, but recently sent a term sheet to Goldman that would be a first step toward severing the contract between the two giants. Experts expect the dissolution to take years.

The partnership has been troubled for some time. One of the fundamentals that went largely overlooked in the Goldman/Apple relationship is that although many people may want an Apple device, not everyone qualifies for a credit card. The relationship requires more cooperation and compromise than either side appears to have wanted.

“One relationship that has worked over the years is Citi’s relationship with American Airlines, which is now close to 50 years old,” said Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research. “There is a clear understanding that credit is at risk with cardholders, and underwriting must consider the importance of FICO scores in accepting or declining the relationship.”

Who Wants to Partner with Apple?

The key question now is who will pick up the relationship, given that banks are already increasing their loss reserves for 2024. And this is not Apple’s first time dealing with an unhappy co-branded partnership. Prior to Goldman, Apple ended a similar relationship with Barclaycard in 2019.

Riley listed off why many of the major players might be reluctant to partner with Apple:

• American Express could afford to acquire the receivable, but their business model is working well, and has been producing plenty of organic growth on its own. 
• Chase is already in many U.S. households that unless there is a compelling reason (and discount to the receivable), they don’t need the Apple name. 
• Bank of America ties their cards to their branch system and has been a modest player in co-brands. 
• Citi has an appetite for iconic brands like Apple, but is undergoing major realignments in its business. 
• Discover has a broad business model that might not make an Apple partnership attractive to them. 

Aside from these companies, there are only a few others with the infrastructure, balance sheet, and/or inclination to profit from the relationship. Synchrony is one possibility, although it would force them to shift some of their existing business strategies.

“There is a learning moment here,” said Riley. “You can’t buy your way into the credit card business. If you lower lending standards, you will pay a price with credit losses. Extending credit requires discipline, modeling, and an acceptance of reality.”

The post After Goldman, a Murky Future for the Apple Card appeared first on PaymentsJournal.

This posting is found in Finextra and discusses a new expanded partnership between Capital One and Melio, the payments automation fintech based in New York City. Many readers will know that one of the major issues emanating from the pandemic is the disproportional negative impact on small businesses of the lockdown policies. This is a continuing problem in terms of managing adequate cash flow given the workforce and supply chain issues. As such, this particular partnership provides additional tools for small businesses to pay and get paid in a more efficient manner. 

‘This strategic partnership will enable Capital One small business cardholders to pay their vendors and suppliers with a card  – even if they do not accept credit cards – directly from their Capital One Business account…

Small businesses across the country continue to use time-consuming and costly methods to pay their vendors, with many still manually writing and mailing checks. Melio’s payments technology for small businesses enables credit cards to be accepted everywhere, saving businesses valuable time and money that would otherwise be spent mailing checks or managing wire transfers.’

One of the best ways to improve working capital effectiveness is to digitize financial operations, either in certain disciplines or across the organization. Small businesses have been generally mired in manual processes and they can benefit greatly by utilizing better tools for payables and receivables. In this case, one of those flexible tools is to use their small business card as a credit source to make a payment to a supplier, even if the supplier does not accept cards. This flipping of payment tools happens in the background and satisfies the needs of both parties. The buyer gets the additional working capital via better DPD and the supplier does not need to adjust their back office, at least for now. 

‘“At Capital One, we recognize the power that adoption of payments technology can generate for businesses. In fact, a recent Capital One survey found that more than a third of small and mid-sized business leaders cite investing in automated, real-time, or fully integrated payables as a top priority over the next year,” said Rebecca Silver, vice president, small business card at Capital One. “Through our partnership with the innovative team at Melio, we are proud to deliver this capability to our customers and continue to help transform how they do business.”

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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Embedded payments are a mobile payment solution that allows customers to make purchases directly from within a mobile app. This offers a seamless and convenient payment experience that can help to boost sales and conversion rates. In addition, embedded payments can help to improve the overall customer experience by reducing the number of steps involved in making a purchase. By making it easier and faster for customers to pay for goods and services, businesses can encourage loyalty and repeat business. Ultimately, embedded payments offer a number of advantages for both businesses and customers alike.

This is a really interesting announcement that synthesizes many of the trends we have been writing about in payments. While arguably late to the party with a mobile app, McDonald’s cuts to the head of the line in omnichannel by enabling stored payment credentials to be used seamlessly at counter, kiosk, or drive-thru with the same customer experience. 

The common CX through the mobile app not only delivers an easy-to-use and repeatable experience for the consumer, it also standardizes payments operations in the back office across channels for McDonald’s. What’s more, this is exactly the type of environment that illustrates the power of what’s being called “embedded payments,” where the payment process is not just simply attached to the order workflow, it runs seamlessly in the background as part of primary workflow. 

Adyen’s capabilities with tools like real-time account updater ensure that the payment flow runs reliably in the background, embedded in the order process, and does not become a source of friction for the customer. Lastly, this is a huge win for Adyen as they demonstrate successful execution of their strategy to expand in the US by leveraging existing customer relationships in the EU and elsewhere.

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

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This release at the Mastercard newsroom announces a partnership between Mastercard and Verizon Business to issue a business card through FNBO. The product will be called the Verizon Business Mastercard and will be available to select existing Verizon Business wireless customers. We recently released member research on the small business card market space in the U.S., where we saw continued growth during the pandemic. These credit products are made available in a multitude of ways through all the major card issuing institutions and are a popular channel for small businesses to expand credit availability and augment cash flow needs.

“Mastercard has been a key partner to us on our journey to help our customers of all sizes transform their businesses and ensure they are truly future-ready,” said Tami Erwin, CEO of Verizon Business. “We are pleased to expand this partnership to include FNBO and bring this small business credit card to our customers at a time when we know they are seeking new avenues to expand their business, manage costs and maximize their use of new technologies to solve challenges to drive growth.”

Small business cards are typically feature-rich as well, and in this case there are rewards options, with no annual fee or foreign transaction fees. The release goes into more of these features. Although a large number of businesses in the U.S. do utilize this type of credit product set, there is still substantial room for growth, especially through exiting business relationships. 

“Today’s small business owner is looking for smarter, relevant, and customized digital financial products that accelerate their operations and make their lives easier,” said Chiro Aikat, Executive Vice President, Products & Engineering, North America at Mastercard. “We’re proud to extend our relationship with Verizon and FNBO to connect the small business segment through meaningful technology and benefits.”…

“FNBO has a rich history of helping small businesses grow and succeed, so we are excited to partner with such a respected brand as Verizon on the launch of their first program for small business,” said Jerry J. O’Flanagan, Executive Vice President, Partner Segment at FNBO.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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DURHAM, NC – May 24, 2022 – Spreedly, the provider of the leading Payment Orchestration platform, announced today that Cybersource, a Visa solution, has joined the Spreedly Payment Service Provider Program as a preferred partner.

Supporting a diverse payments ecosystem that helps businesses of all sizes and types, preferred partners work closely with Spreedly to foster an environment that offers connectivity between payment service partners and a global network of merchants and merchant aggregator customers.

Through one API integration, Spreedly provides access to Cybersource’s robust set of solutions including fraud management, payment acceptance and security. The news builds upon a long standing partnership between the two organizations.

‍“Joining Spreedly’s partner network will make it simple and straightforward for busy sellers to plug into our modular secure payment platform, and accept and secure payments,” says Head of Global Partner Programs, Josh Park with Cybersource. “This partnership ensures customers can conduct business anywhere throughout the world with confidence and ease.”

“Becoming a Spreedly partner enables access to the world of Payment Orchestration and brings increased value to more merchants, merchant aggregators, and marketplaces around the world,” said Senior Vice President, Rohan Bairat with Spreedly. “By participating in this program with Spreedly, our partners further extend their global reach and accelerate the onboarding of new merchants and platforms. That means more transactions and higher satisfaction for everyone.”

More information about the Partner Program is available at spreedly.com/partners. 

About Spreedly
We orchestrate payments for the world’s most innovative businesses. Global enterprises and hyper-growth companies grow their digital business faster by relying on our payments platform. Hundreds of customers worldwide secure card data in our PCI-compliant vault and use tokenized card data to enable and optimize nearly $40 billion of annual transaction volumes with any payment service. Spreedly is headquartered in downtown Durham, NC. www.spreedly.com

About Cybersource
At Cybersource, we know payments. We helped kick start the eCommerce revolution in 1994 and haven’t looked back since. Through global reach, modern capabilities, and commerce insights, we create flexible, creative commerce solutions for everyday life—experiences that delight your customers and spur growth globally. Today, more than 450,000 businesses worldwide use Cybersource and Authorize.net solutions. Our company has offices throughout the United States, Asia, Europe, Latin America, the Middle East, and Africa. www.cybersource.com

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The supply chain is a complex network of suppliers, manufacturers, distributors, and retailers that work together to get products into the hands of consumers. Managing this supply chain effectively is essential for businesses of all sizes. Traditionally, supply chain management has been a manual process, with businesses relying on paper documents and phone calls to keep track of orders and inventory levels. However, the advent of new technologies has led to a revolution in supply chain management. Digitization has allowed businesses to track orders and inventory levels in real time, plan production more efficiently, and even ship products directly to consumers. As a result, supply chain management has become increasingly important for businesses that want to stay competitive. In addition, the rise of supply chain finance has made it easier for businesses to access the capital they need to invest in new technologies and expand their operations. How is U.S. Bank adjusting in the current climate?

This posting is in Yahoo! Finance and discusses a collaboration agreement between U.S. Bank and LiquidX, the New York City-based fintech that provides a trade finance transaction marketplace for multiple industry participants, including FIs and various corporate verticals. We have been covering this space for many years through member research, and as many readers will know through these pages the pandemic has highlighted the value of effective working capital management, especially amongst SMEs. 

‘This collaboration – which comes at a time of unparalleled stress in the global supply chain – will pair the bank’s strong balance sheet with LiquidX’s streamlined platform technology to help address supply-chain-finance friction and cash-flow challenges facing many companies. Suppliers and buyers will be able to connect their supply-chain systems directly to U.S. Bank and transact through LiquidX’s easy-to-use platform. U.S. Bank financing solutions delivered through this collaboration will enable suppliers to be paid nearly immediately and buyers to receive extended payment terms…

“With so many supply-chain challenges for businesses, we want to help make the financing process as smooth as possible,” said Dan Son, who oversees global trade and supply-chain finance at U.S. Bank. “This new collaboration will deliver a single intuitive interface that seamlessly connects suppliers, buyers and our bank in the supply-chain ecosystem. As one of the most trusted banks in the U.S., with some of the highest debt ratings, we can unlock valuable working capital for our clients.”’ 

As we have been advising for years, the digitization of cash cycle systems and processes creates a window into the world of latest generation technology that can greatly improve banks’ client options for managing their cash flow needs. This runs across procurement, payables, receivables and trade financing, among other things. So this move by U.S. Bank is in line with the further access to digital options for their corporate clients in a time of uncertainty, which is a good thing.

‘The collaboration between U.S. Bank and LiquidX enhances existing supply-chain-finance solutions currently available to U.S. Bank clients. The Receivables Purchase Program allows sellers to convert credit sales to immediate cash flows and reduce days sales outstanding while extending payment terms for buyers. The Approved Payables Financing Program helps buyers pay suppliers early, reduces payment-processing costs, and gives suppliers faster and more predictable access to cash…

As supply-chain decisions become strategically critical for businesses, Son said, innovative supply-chain-finance solutions provide opportunities to strengthen vendor and client relationships, reduce costs, and diversify sources of working-capital funding. In addition, supply-chain-finance solutions can advance other important company priorities, such as Environmental, Social and Governance (ESG) initiatives by providing financial incentives and greater access to working capital for diverse suppliers.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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Yes, another posting about CBDCs, this one at the Block, so we will keep everyone posted, although much of this is repetitive for those following the space and certainly for members of our advisory service, for whom we wrote a report a few months back that included commentary about a similar BIS initiative. This effort is called Project Dunbar and explores prototypes for instant cross-border payments using CBDCs.

‘The Bank for International Settlements (BIS) Innovation Hub partnered with central banks in Australia, Malaysia, Singapore and South Africa to create two prototypes for an international settlement platform using multiple central bank digital currencies (CBDCs)…

“This initial phase of the project successfully developed working prototypes and demonstrated practicable solutions, achieving its aim of proving that the concept of multi-CBDCs was technically viable,” the executive summary of the project report states…

The collaboration, called Project Dunbar, focuses on how a shared platform incorporating several CBDCs could help make cross-border payments “cheaper, faster and safer” as described in that report.’

This following is excerpted from the Mercator Report of several months back, which was discussing what was then a single entity named Nexus, and this current project seems to be similar in nature with a couple of different central banks:

The BIS Innovation Hub has also jumped into the action with a July 2021 announcement about connecting instant payments systems (IPS) in multiple countries through a single entity, which they have named Nexus. According to the BIS website, they are already transitioning from design to a test phase, involving a proof of concept with the Monetary Authority of Singapore, Bank of Italy, Central Bank of Malaysia, BCS in Singapore, and PayNet in Malaysia, to connect the payment systems of Singapore, Malaysia and the euro area. This standardized way for IPS to connect should enable interoperability between systems at scale.

There are two main elements of the system: the Nexus Scheme and the Gateway. The Scheme defines the rules and obligations for participating users, while the Gateway software component coordinates the foreign exchange (FX), clearing, and sequencing of payments. Settlement remains part of the existing domestic schemes, also introducing destination liquidity providers where necessary. Once compatibility with Nexus is established, the IPS can exchange payments with any other Nexus user across the scheme. Although we could not locate an expected full launch date, typical timeframes would suggest sometime in 2023.

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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Green Dot and Plaid announced the integration of Plaid’s finance ecosystem into Green Dot’s GO2bank. The combination continues the development of open banking to meet customer needs. Tilly Kenyon with FinTech Magazine reported:

The partnership leverages Plaid’s innovative open finance API solution Plaid Exchange, which helps companies quickly and securely facilitate data connectivity on behalf of their customers.

“Plaid is working to ensure that inclusivity is the industry standard,” said Ginger Baker, Head of Financial Access for Plaid. “Our partnership with Green Dot helps GO2bank customers securely connect their accounts to the apps and services they choose. We are excited about the joint commitment to universal access and how it enables all populations to access the tools they need to lead healthier financial lives.””

The pairing provides GO2bank customers access to the full roster of apps powered by Plaid, enabling greater financial literacy especially for those in underserved communities, as Kenyon explains:

It also underscores how both companies are aligned in the mission to provide financial access and freedom for all, reaching consumers who may have been shut out of traditional banking services due to lower income levels or credit-thin histories.

Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group

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