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Pumped with Full-Service Knowledge

I n the super-competitive payment-processing arena, ISOs are squeezed like sardines, all gasping for space and trying to break out with new products and services. One company is providing a breath of fresh air through the emerging pay-at-the-pump market. As a specialized merchant service provider with expertise in specific technical knowledge of petroleum interfaces and hardware requirements, Petroleum Card Services offers petroleum solutions for independent sales organizations via all major networks. Two astute industry professionals, Andrew Hackler and Cindy Fencl, first started researching the marketplace in early 2000. Taking a full year to come up to speed on all necessary requirements, both technological and logistic, they opened the doors to Petroleum Card Services in Nevada with one goal in mind - to effectively capture the pay-at-the-pump processing business.

"We developed the company by really talking to people in the industry, actual pump vendors, equipment suppliers, different processors," says Hackler, President of Petroleum Card Services. "We formed a basis for the business, and then we took it further and developed tech knowledge."

That knowledge encompassed encryption models, processors, pump-type compatibility with controllers and related equipment. Hackler and Fencl met with people on the mechanical side of the business to define the market; once the market was defined, they then found a processor (Concord EFS) best suited to meet their business. "It's very difficult for the normal ISO to get into this market," says Hackler. "There are a lot of technical and logistic aspects that have to be met to get them up and running. Most do an immediate about-face. It's too intimidating."

To eliminate ISO intimidation, Petroleum Card Services has created a solid infrastructure that can take the business application all the way through installing it at the gas station.

Hackler defines his organization's core competency in simple terms: "We provide access to a market ISOs have never been able to access."

And it is an emerging market. With recent acquisitions and mergers of the large oil companies, many have had to spin off some stations to independent and unbranded owners, many of which are in need of independent pay-at-the-pump services. Sounds inviting but not all that easy.

As many ISOs can attest, this is not a typical payment-processing space. When ISOs want to sell a pay-at-the-pump service, they have had to work with pump technicians - professionals who supply the equipment to the gas stations, install the equipment and support the station owners. They do all the downloading, handling blocks of gas stations. Whatever issues need addressing, a pump technician must be called.

What Petroleum quickly realized was that every pump technician needs a reliable network. It is a necessity of the business.

"Anytime you need to do anything with the pump, a certified technician must be involved," says Hackler. "What makes us unique is our relationship with those pump technicians. We got it through establishing contact, understanding their needs and speaking their language."

The language Petroleum Card Services speaks also has been enhanced by its relationship with its processor of choice, Concord EFS. While Concord EFS has handled those large branded stations in the past, it didn't aggressively court the independent, unbranded side. That's where Petroleum Card Services came in, being the singular conduit to this growing market.

"Concord EFS was a pioneer in this business," says Hackler. "We approached them because of their position in the industry. They were our best fit."

And, according to Hackler, Concord EFS was receptive to the alliance.

In addition to having a strong processor, Petroleum Card Services has other benefits that are attractive to the ISO community. Certified on all pump and controller types, Petroleum Card Service has unequaled knowledge of pay-at-the-pump operations.

Why does success in this space require such specific technical knowledge of gas station interfacing and hardware? "There are a number of companies selling different products compatible to certain things and nothing," says Hackler. "It is all a debit issue. The pump systems make their own controller."

For instance, VeriFone is the only manufacturer that makes a terminal compatible to all types so as not to be left out of any processing equation. However, the only piece it sells is the controller. Other manufacturers sell pumps with the controller being secondary. With controllers determining what point-of-sale system to run on, manufacturers write their own software with distinct specifications.

In addition to technical know-how, another advantage Petroleum Card Services offers the ISO is choice. The independent agent can provide Petroleum Card Services with a lead and Petroleum Card Services will take it from there, including application processing, site inspection and account setup.

On the other hand, the ISO can do the application process, site inspection, quote the merchant a price and then submit the package to Petroleum Card Services, which completes the setup.

"In the normal swipe retail environment, ISOs can download data and bring up their merchants," says Hackler. "It's just way too technical in this industry. An ISO can just get the app, send it to us and we're on it from start to finish. We stand by for the download with the actual pump technician. "

The turnaround time for this process is two to three days initially for MID numbers, and from the moment the pump technician is contacted, it averages from 10 days to two weeks for the account to be officially set up. Once that account is up and running, it takes 60 days for the initial revenue stream to start flowing to the ISO, with residual checks paid every 30 days thereafter. There are no application fees, no setup fees and no minimum for the ISO.

Support is another component to Petroleum Card Services' commitment. Customer support is available during normal business hours (8 a.m. to 5 p.m. PST) with 24/7 processor support through Concord EFS. "In many cases, the ISOs are just looking for a place to take an application, but we are there for all their needs," says Hackler. "Once you bring one of these stations up and realize they have the support; they are not going anywhere. What is great is that everyone is happy, start to finish. The pump tech is happy he's got someone to talk to. The merchant is happy with extremely competitive rates. The ISOs are happy they have a home."

Just a few months since officially opening its doors, Petroleum Card Services is working with more than 100 merchants in its targeted market of independent and unbranded gas stations. It has contracted from 25 to 30 ISOs and looks to increase that figure.

According to Hackler, Petroleum Card Services will do whatever it takes to make ISOs comfortable about bringing pay-at-the-pump accounts to the company, including in-house training sessions as well as on-site ones, depending on the size of the ISO.

Petroleum Card Services keeps all of its services in-house as far as application process, profiling, pump technician relationships, Web services and training. The only outsourced item is the processing with Concord EFS. This dedication to internal servicing provides for complete control of operations.

"We do so many variables," says Hackler. "Like the wheel man in a restaurant, we keep everything happening at one time, and there is no one except us who does this."

That attitude has caught the attention of some major players. Humboldt Bank announced an alliance with Petroleum Card Services for all of its pay-at-the-pump processing. Money Tree is using Petroleum Card Services exclusively as well. And then there's the United States government.

Voyager is a fleet network that has contracts in 26 states with the government and major companies such as the U.S. Postal Service, the Department of Agriculture, even Sprint.

Anyone who has a fleet network, whether it be government or corporate-based, provides employers with a Voyager card for gas purchases, tires, auto repair, etc. This is a huge market in which many independent and unbranded gas stations need to participate.

About 160,000 gas stations, auto repair shops, car washes and the like in all 50 states are accepting Voyager cards. Petroleum Card Services has an agreement with Voyager. Any ISO looking to take advantage of the Voyager card can bring up a merchant through Petroleum Card Services. In fact, Petroleum Card Services is getting requests from gas stations for Voyager access and would welcome ISOs to work with the company on those accounts.

If that isn't impressive enough, the other major fleet network that Petroleum works with is Wright Express, which boasts 120,000 sites nationwide. Hackler makes it clear that Petroleum Card Services is not looking to compete with ISOs; rather, it wants to work with them: "Our plans are that once we have ISOs in place, those leads will go to them. We are in complete support of our ISOs. This is a face-to-face industry and, currently, we don't have a big enough ISO base to meet the faces."

Does Petroleum Card Services have criteria for ISO?

"We are looking for (anyone) interested in doing this business properly," says Hackler. "We have no specific requirements. We'll work with small ISOs as well as the big guys. I always thought it was unfair the way the little guys are treated. I don't care if the guy works out of his house or has 20 employees. If they'll do the business the way we want it, manage it the way it needs to be managed, we want to work with them."

Now would seem to be the time for those eager ISOs to put pay-at-the-pump in their repertoire. Hackler sees this industry increasing dramatically as a lot of stations de-brand and the demand for fleet networks increases.

"In order for auto repair shops, auto parts stores, gas stations and car washes to access the major government and corporate accounts, they must use a processor that settles these programs," Hackler says. "We are the best choice."

Hackler also points out that not only will that ISO get all the merchant's fleet business, they'll also get all the other pay-at-the-pump credit card processing business. With the projected dramatic growth of this industry, Petroleum Card Services plans on growing just as dramatically.

"Our growth in the next year will be tremendous," says Hackler. "We have established ourselves. People know what we can do and people need someone like us.

"Everyone needs someone who takes care of details, properly processes; follows through with vendors, technicians and ISOs. I don't know of anyone right know who fills this need other than Petroleum Card Services."

Petroleum Card Services, Inc. ISO contact: Cindy Fencl, Executive Vice President Phone: 866 427 7297 E-mail: pcs@775.net

Company address: 1664 Highway 395, Suite 104 Minden, NV 89423 Phone: 866-427-7297 Fax: 775-782-7572

ISO benefits: - Provides access to new market for ISOs, with link to pump technicians. - Unequaled knowledge of pay-at-the-pump operations, which are highly technical. - All services in-house. - Eager to work with ISOs, not compete with them.