By Bernie Kavanagh, Senior Vice President and General Manager of Large Fleet, WEX, Inc.
By getting machines to recognize patterns on their own, machine learning has powered massive data transformations across industries, making computing processes more efficient and affordable and making it possible for cars to drive themselves and for internet search functions to become increasingly sophisticated. In the fleet industry, it’s already helped companies cut down on unnecessary fuel spend and to adopt technologies such as video-based driver safety systems. And thanks to new advances in Application Programming Interfaces (APIs), machine learning is now providing an entirely new level of data protection and security for B2B and cross-border payments.
These types of payments are historically complex and scattered through multiple parties. They require the movement of data along with funds and have been more complicated to track for mishaps and more vulnerable to fraudulent and unethical spending. In the past, to predict future spendings, companies had to manually track data-focused spending trends and habits. Today’s APIs allow fleet companies to monitor for suspicious behavior and fraudulent activity while also providing their employees with several options for payment.
How can APIs help fleets tackle these risks?
1. Manage Unauthorized Purchases
Fuel cards help businesses run their vehicles, document and analyze fuel purchases, and limit exposure to unauthorized purchases. Legacy payment types such as debit cards, credit cards and cash lack the ability to restrict purchases or report on what businesses are spending on fuel. A fleet card allows operators to manage those purchases by assessing the data collected from every purchase and using it to ensure organizational policies are being followed. This efficiency also frees up administrative resources for higher-level tasks.
A closed-loop fuel card uses a network that allows the user to control the type of merchant where the card can be used, the type of products the card can purchase, and what time of day, day of the week, dollar amount, and frequency the card can be used.
With open-loop products such as a traditional purchasing card, the bank or issuer may not own the entire chain. So you might have an issuing bank, someone else doing the processing for you, and another institution doing the billing. A closed-loop network is a proprietary network where the organization releases specifications to the merchants at acceptance. They become the issuer, the processor, the biller, and basically own the entire chain.
That allows the fleet card provider to control what data is captured and what to do with it. It’s a more secure network, because data is not being passed to anybody before it comes back to the customer.
2. Improve Driver Safety
For fleet managers, safety is a constant concern. Not only do drivers put themselves at risk every time they get behind the wheel, but vehicular accidents also represent a significant source of financial loss, accounting for as much as 14% of a fleet’s total expenses.
Telematics help managers measurably improve fleet safety. GPS vehicle tracking through telematics collects real-time data on unsafe driving behaviors, such as speeding, harsh braking and rapid acceleration. It can also monitor vehicle locations, engine diagnostics, fuel usage, and more. Thus driver risk can be quantified using concrete indicators and hard numbers, enabling fleet managers to easily identify where and when action is needed most.
With telematics, decision-makers can adopt a proactive, rather than reactive, approach to fleet safety. Armed with telematics data, managers can better customize driver training and coaching programs, minimize accident incidence rates, and even reduce fleet insurance premiums.
3. Fraud Prevention and Detection
Fraud is definitely a big issue for companies managing their fuel costs.
One of the biggest issues is skimming. Offenders install devices on pumps at fueling stations to read information from magnetic-stripe cards as they’re swiped. Then they steal the account information and clone a counterfeit card to be used elsewhere. EMV chip cards are on their way, but it will be a few years before they are accepted everywhere, perhaps 2020 at the earliest.
For now, a fuel card helps in numerous ways. By setting up a fuel card with driver identification numbers, companies can track unauthorized spending or easily manage lost or stolen cards. Having these controls setup by driver or by vehicle, managers can get better insight into what their drivers are buying. And many fuel cards have an automatic pump shut-off feature that will stop a fuel purchase that exceeds company policy before it can be completed.
Fraud also takes the form of employee misuse, which can be remedied with tight tracking of fuel card purchases. Another remedy is pairing a fuel card with GPS tracking devices, which tells savvy managers whether the vehicle a fuel card says was being fueled at a certain station was actually at that station – or somewhere else.