Driving Into Digital: How Modernized Payments Platforms Impact Fleet Management

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When a driver misplaces their fleet card or uses it to fuel a personal vehicle, the consequences can be significant for the organization. Shifting to digital payments can help alleviate these pain points, yet many fleet managers have been hesitant due to concerns about maintaining control.

In a recent PaymentsJournal podcast, Parker P ierce, Senior Product Manager at Highnote, and Ben Danner, Senior Credit and Commercial Payments Analyst at Javelin Strategy & Research, discussed the challenges fleet managers face with current payment systems, the benefits of emerging technologies, and strategies for modernizing fleet payments.

Tokenizing Payment Prompts

One of the main barriers keeping fleet managers from adopting mobile payments is that fuel cards operate differently from many other credit cards. They have purchase restrictions built into their EMV chips, which dictate whether the card can be used for fuel, maintenance, or other products.

These chips can also have built-in security prompts that require the driver to enter their driver ID or mileage before a purchase is approved.

In the past, when a fleet card was tokenized and added to a digital wallet like Apple Pay or Google Pay, these purchase restrictions and prompts were not carried over. This was a dealbreaker for many fleet managers, who didn’t want restricted products, such as a fuel-only card, to act like an open card when added to Apple Pay.

“That’s changing now, as we’re seeing support added from the payment networks and the issuers,” Pierce said. “Now, when you tokenize your card into Apple Pay, if it was a fuel-only card on the physical side, it’s going to act like a fuel-only card in the Apple Pay wallet, which is a huge innovation. All the advantages for digital payments carry over to fleet—without that added risk of losing those restrictions that you wanted.”

Digitizing fleet payments also allows managers to expand their control over transactions. With a physical card, security prompts are built into the EMV chip when the card is issued. If it is initially set to request a driver ID, it will prompt for this information on every transaction for the card’s lifetime.

With an application, the fleet manager can adjust these prompts as needed.

“For one driver, they may want to put in a driver ID,” Pierce said. “For another driver, they may want another type of question for security reasons or just for tracking different types of information. For some drivers, they may ask them one question, while for another driver, they might have three, based on their route or their risk profile. Beyond just the ease of use, there’s also added benefits of security and flexibility for these app-based solutions.”

Embedding Fleet Payments

Once the door to digital payments is opened, fleet managers can leverage a host of other innovations. For example, some companies offer apps that can connect a device to an automated fuel dispenser (AFD), allowing drivers to pull up to the pump and complete the transaction directly from the app, dramatically reducing friction.

Additionally, emerging technologies could accelerate this process even further.

“Looking towards the future, what I think is exciting are embedded devices, which are beyond even the phone and the physical card,” Pierce said. “It’s that same EMV chip that’s in a physical card but put into some other entity. For a driver, they could have a key fob that is enabled for payments.”

“It can get really exciting to start combining these technologies—to have a key fob mixed with an AirTag, all in one on the driver’s key chain,” he said. “Then they can just come up and tap-to-pay with their key fob and their location is being tracked as well. We’ve heard about this with clothing, bands, and watches. There are all sorts of exciting things coming down the line on the payment instrument front when we talk about embedded devices.”

The Persistence of Physical Cards

Though there are real-world use cases for these emerging technologies, one thing is clear: physical cards aren’t going away anytime soon. Just as they continue to resonate with consumers, physical cards remain in demand for fleet operations for several reasons.

Some drivers may not be tech-savvy and lack the know-how to download and use a payment app effectively. Others may simply prefer the familiarity and reliability of physical cards.

On certain rural routes, drivers may not have reliable cell or Wi-Fi signals to complete a transaction. Additionally, some fueling stations may not yet support tap-to-pay.

For these reasons, most fleets won’t be able to fully phase out physical cards.

“As excited as I am for digital, there is still a place for physical cards,” Danner said. “The future will be more of what we’ve been calling a ‘strategic coexistence of different payments products together.’ It isn’t an all or nothing thing. You can have drivers with physical cards that want to bring them into the digital space, or you can continue to have physical cards in the mix.”

“You could have your physical card on you and still have that card embedded in your mobile device, and then it’s up to the driver to make that choice,” he said.

Balancing Digital Payments

Fleet cards keep drivers on the road, so managers want options that make fuel and fleet maintenance purchases as frictionless as possible. However, they must constantly balance ease of use with risk and fraud considerations.

“At the same time, those same fleet managers need accessible tools so they can manage the spend for their drivers,” Pierce said. “They need to be able to analyze that spend after the fact to reduce fraud. Not just looking at a report of what happened, but being able to see things like real-time alerts when a transaction occurs that’s over a certain amount or maybe at a location that isn’t on a driver’s particular route.”

Additionally, fleet managers seek efficiency gains by minimizing manual processes, such as capturing receipts. They also aim to control costs by leveraging the powerful rebate and fuel discount programs offered by commercial cards.

Digital payments enhance these efforts. With smartphones and payment apps now ubiquitous, the learning curve is often shorter—and drivers are less likely to misplace a phone than a physical card.

The risk of device loss drops further when company-issued phones with location sharing are used. This data can also help organizations monitor transaction locations and reduce fraud.

Digital payments offer another key benefit: drivers don’t need to visit the office or wait for a card in the mail. Instead, they can receive a digital card, load it onto their phone, and begin using it right away.

Perhaps most significantly, digital payments accelerate transactions—delivering speed alongside convenience.

“There’s something to be said for digital payments and reducing friction at the point of sale,” Danner said. “All of this is controlled in a unified mobile experience without having to reach in your wallet and fumble and look around for that physical card. Everything is going into this digital world and that goes a long way toward reducing friction.”

The Best of Both Worlds

While physical cards remain reliable, the benefits of digital payments suggest that fleet companies should consider a hybrid approach. However, the added complexity can leave many fleet managers uncertain about the best path forward.

“First and foremost, fleets need to consider what are their biggest pain points right now with payments,” Pierce said. “Is it lost physical cards? Are you having trouble with friendly fraud, like a driver letting someone borrow the card or using their card to fuel up their personal vehicle? Do you have a lot of remote fuel locations?”

“Beyond that, how do you manage your cards—is it per driver or is it per vehicle?” he said. “Do you provide company issued phones or not? Lastly, how tech-savvy are your drivers? Fleet managers need to consider all those things and then decide: do we want to go fully physical cards, fully digital or most likely, are we going to have some mix of both that best fits our situation?”

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