By On Track Innovations

Contactless smart card technology has been in widespread commercial use in the United States since the mid 1980's with the advent of long distance contactless technology for toll roads. The technology can be found throughout the United States in areas like New York City (EZPass), Georgia (Cruise Card) and Maryland (M-tag). Each system works on either a prepaid basis or is linked to a credit card or bank account. When funds on the card drop to a certain level, the pass/card is refilled and the credit card or checking account is automatically billed.

Mass transit systems have been one of the primary early adopters to contactless smart card technology. For more than twenty years, transit systems around the world have used magnetic stripe cards for fare collection. These systems are fairly limited in the amount of information that can be stored on the magnetic stripe. Hong Kong became the first municipality to widely use contactless smart cards when it issued its Octopus card in 1997. The card has become so popular that over 100 retailers in and around the transit system now accept it for payment.

In the United States, perhaps the most widespread retail application for contactless smart cards is the ExxonMobil SpeedPass. The program began in 1997 and according to ExxonMobil, now boasts over 6 million users and over 7,500 participating Exxon and Mobil stations. Initially, users of the system received a key fob that communicates with a receiver at the gas pump or point of sale terminal. The SpeedPass has expanded in recent years to include retailers like McDonald's in Chicago and Stop-N-Shop in the Boston metro area. The success and growth of the SpeedPass program has led to a number of smart card pilot programs from other retailers including Shell, Taco Bell and Kentucky Fried Chicken.

To date, petroleum payment management has been one of the largest beneficiaries of contactless smart card technology in the United States. With the technology powering smart cards increasing substantially coupled with a significant decrease in manufacturing costs, the time is right for a proliferation of smart card applications. OTI has created a cost-effective fuel management system that meets the demanding needs of fleets and private motorists named EasyFuel.

The EasyFuel system brings the functionality of contactless smart cards to the next level. EasyFuel is a contactless smart card based gasoline management system from On Track Innovations Ltd or OTI. Since 1990, OTI has provided smart card solutions worldwide to a number of industries including campus security, parking and mass transit ticketing. Its microprocessor-based smart cards are ISO 14443 compliant and use matched antenna technology for greater power and data transmission rates by an electromagnetic field that is generated by the reader. This is in contrast to older legacy systems that use resonance circuit technology that fails to generate sufficient power to effectively operate the current generation of microprocessors.

Implementing a contactless pay-at-the-pump system is attractive for numerous reasons. Perhaps the greatest benefit is convenience. People want to get their gas and go and don't want the hassle or inconvenience of entering a store and waiting on line. For station owners, pay-at-the-pump systems have the benefit of operating 24 hours a day with a reduction of staff. In some instances and areas, stations can be left completely unattended can only be dispenses when the pay-at-the-pump system is activated.

OTI has developed a pay-at-the-pump system that requires a substantially less capital investment than existing fuel management systems. Each station needs only one site controller and a nozzle unit on each pump. Communications do not require any station infrastructure and take place between the controller and the vehicle directly through radio frequency antennas. Maintenance is also minimal since no coax cable is inserted inside the fuel nozzle, and does not require replacement like in other systems. For additional security, EasyFuel offers a driver ID card that can be used to cross-reference drivers and their vehicles. The card can also be used at point-of-sale terminals in the store for purchases as well.

The site controller is a radio frequency unit that connects to the station's point of sale terminals through an RS232, USB or PS2 connection, enabling plug-and-play connectivity to the station's existing infrastructure. It reads information from the vehicle tag inside a fleet vehicle and transmits it to the site computer that authorizes the transaction. The controller has an operating range of up to 33 meters. Fuel is dispensed only when communication is established between the nozzle unit and the vehicle tag. The system uses SAM and flash memory making updates and transaction processing easy and cost effective. Most importantly, communications are encrypted using multiple techniques insuring security and data integrity without any corruption.

The nozzle unit is attached to any standard fueling pump without the use of cables or swivels. Only when the correct fuel grade is selected and the nozzle is inserted in the tank inlet will the authorization be approved and the fuel dispense. This is especially useful for fleets where fuel management is critical. Refilling will only occur as long as the vehicle tag and nozzle unit are communicating over an operating range of up to 45 centimeters.

Fleet users of EasyFuel receive a dual frequency smart card and fuel inlet and long-range antennas. The long-range antenna is attached to the back of the car. Contact is established with vehicles using the EasyFuel system when they are still moving as they enter the station. The vehicle tag can store a variety of data including fuel grade, permissible volume, as
well as registration information and method of payment. The smart card has full read/write capability allowing for an easy integration of future applications. The tag can be remotely encoded and uses complex security algorithms to eliminate fraud and human error.

Another benefit of the EasyFuel system is its ability to manage loyalty programs. As a read/write device, the smart card key fob and/or vehicle tag is programmed with a loyalty reward structure based on purchases and consumption. Users can receive their awards in real-time, as they are reached. When a user gets an award like a cup of coffee or a free car wash or gas, they are prompted to enter the convenience store to retrieve it, promoting additional spending by the consumer. This is also a very effective marketing tool that can be used to build-up existing and new customer resources databases.

For the past few years, the system has been operating in South Africa via BP and Exel under the brand name FuelMaster. There are approximately 500 stations and over 40,000 vehicles currently taking part in the system. In 2002, over 26 million gallons of gas were dispensed through FuelMaster with an expected 45.2 million gallons for 2003. OTI receives a volume-based fee and a monthly management fee for its back-office services. FuelMaster was originally geared to fleet customers as a method to help eliminate fraud, improve billing, information management and processing times. OTI recently announced that ABSA Bank, South Africa's largest commercial lender, has joined its FuelMaster Express program. The program, geared to private motorists, provides access to over 400,000 motorists in ABSA's fuel card programs, allowing for a much greater penetration into the consumer market. BP has endorsed the system and the mayor of Capetown gave a special recognition to OTI. The trial has been so successful that BP Africa is expanding the system to ten additional countries.

There are many factors including cost, portability and infrastructure investment, to consider when deciding on a pay-at-the-pump petroleum distribution system. EasyFuel has proven itself as a low-cost and effective tool in creasing sales and customer loyalty. The time is now to consider moving forward to a contactless payment solution.