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Pumps: Cash converters

02 May, 2013
Cash has become the latest method of payment at the pump on UK forecourts
Page 26 

Consumers are used to putting cash in a machine whether it's when they're paying for parking, buying a ticket at the train station or settling the basket shop at a self-service checkout in the supermarket. So the arrival of cash acceptance on the forecourt was probably only a matter of time. Northern Ireland-based Lissan Coal Company's (LCC) new GO-branded site in the centre of Belfast has become the first petrol station in Europe to install dispensers with an integrated bank note acceptor. The unmanned site, which opened in March this year, is now seeing 40% of motorists paying with cash, with the method of payment proving particularly popular with taxi drivers and motorists trying to manage their spending.

Ian Jacques, managing director of Scheidt & Bachmann, which supplied the Clou pumps with multi-media touchscreen and integrated card and bank note acceptance, says: "There's been a remarkable response to cash payment in Belfast and it has exceeded the expectations of the retailer. We predicted that 20% of customers would choose to pay with cash given the option. In fact, we have seen 40% choosing to use the cash option."

The introduction of cash acceptance at the GO forecourt in Belfast was a move driven by LCC, as Jacques explains: "Our customer in Belfast requested an integrated bank note acceptor solution and as it is an extension of our core company competence where we provide cash acceptance as standard in our car parking and train ticketing divisions, it seemed a natural and logical progression.

"While the subject of taking cash at the pump seems to be revolutionary to our industry, we see it very much as an evolutionary process like taking card payments was some 20 years ago. We had the concept and design of the dispenser with cash acceptance for a number of years, but it was the vision and ambition of our customer that has brought the concept to life.

"It is difficult to predict how popular pay-at-pump will become because there are a number of factors that influence the adoption of outdoor payment technology," adds Jacques. "For example, some retailers are tied to an in-store card processing scheme through their oil company contract where the technology doesn't support an extension to add a compatible outdoor payment device.

"However, we have seen there is a huge appetite to be able to pay with cash at the pump, and this is not restricted by card processing schemes."

Meanwhile, Tokheim has developed a bank note acceptor on a standalone outdoor payment terminal (OPT). A number of these Crypto OPTs, which combine a cash acceptance system with credit, debit and fuel card acceptance have been installed at sites in the more remote parts of the country.

Adrian Beeby, national sales manager at Tokheim UK, says: "At these locations, having staff on-site around-the-clock is not feasible so our unmanned solutions offer decreased overheads while bringing secure 24-hour fuelling. With both our Crypto VGA and Tokheim EYE CCTV system our customers can be confident that their site will be taking income with less cost and be protected from 'drive-offs' or fuel theft.

"And having recently gained our Unmanned Payment Terminal PCI certification, which is a dedicated approval scheme for unmanned payment devices, we offer the retailer even more peace of mind."

Beeby says that Tokheim has seen a marked increase in interest in OPTs, and this year the company installed its 10,000th Crypto VGA. "On one hand, a lot of this is being driven by the number of drive-offs and, on the other, the cost of running service stations today," he says. "Also, for busy sites with large forecourts, our Crypto systems offer a simple solution to alleviate congestion, bringing a quicker throughput for our customer. Retailers are using it as a 'fast lane' to increase wet-stock sales."

Gilbarco Veeder-Root has also seen an increase in enquiries and installations for outdoor payment across all segments of the UK market. John Tierney, marcomms manager at Gilbarco, says that as fuel prices rise, the amount of drive-offs is increasing so retailers are looking to outdoor payment as a means to combat this, as well as a means of trading when sites are closed and unattended.

"Standalone OPTs such as our NP3 or B2B units tend to be more popular with the dealer segment," says Tierney. "These customers like the fact that our standalone models, which include single and double-sided units, can be used with any pump and can control up to eight fuelling positions from one unit.

"Our supermarket and major oil company customers, however, tend to opt for CRIND (card reader in dispenser) solutions, which can be provided for most of the pumps installed in the UK forecourt. All of our payment terminals can be integrated with the Gilbarco Veeder-Root Passport Europe POS system or, following a recent development, with the Micros POS system."

In April last year, Micros (formerly known as Torex) and Gilbarco formed a new partnership allowing Micros epos technology to be linked to Gilbarco's standalone FlexPay NP3 OPT, which gives retailers the opportunity to offer a pre-pay option on their forecourts.

The system is connected via ethernet to the Micros epos system, which manages the transaction process alongside in-store transactions.

Multi-media screens

With the most profit on the forecourt coming from shop sales rather than fuel, more retailers are looking at ways they can promote shop offers to motorists while they're refuelling at the pump.

Gilbarco's Tierney says: "Customers are using our multi-media options as a means of highlighting offers in store to drive visits and increase uptake of promotional offers. Our multi-media solution Applause Europe is one of the most popular additions to the SK700-II and Horizon dispensers. We have seen a great deal of adoption by UK dealers looking to differentiate their forecourt. The main focus of these early adopters has been to promote their c-store through targeted campaigns."

Ian Jacques from Scheidt & Bachmann says that every retailer he speaks to is interested in discussing the multi-media option whereas previously they were only interested in a pump that dispenses fuel. "On sites where we have implemented multi-media technology there is a clear increase in retail sales of c-store products, often up to 20%," he says. "Retailers can see fuel sales linked directly to the increased shop sales when promotions are advertised via the multi-media screen on the pump. Having a touch-screen interface gives the customer the option to choose the most appealing offers.

"There is a stronger than ever desire to maximise shop and retail sales," adds Jacques. "We have seen the interest in multi-media and outdoor payment as a means of convenience increase significantly in the past 12 months. As the industry matures and adopts this technology I believe this will be the new standard for all forecourts to help drive retail sales and loyalty."

Tokheim's Adrian Beeby says that take-up for the pump manufacturer's multi-media screens and software has been very positive with a big increase in orders this year. The T-Media multi-media solution has become the first cloud-based application that allows retailers to organise and play media on their dispensers. Adrian Beeby says: "Dozens of independent sites across the UK are now choosing T-Media for three reasons: because of its 17-inch screen, which is the industry's largest; its practicality because it is cloud-based and therefore can be accessed remotely from a smartphone or tablet; and, frankly, for its cost effectiveness."

T-Media is an event-driven media application, which means retailers can deliver a variety of messages using much more sophisticated marketing methods. The media can be driven by default standard events such as 'idle' using a welcome/safety message; 'fuelling', at which time retailers can promote shop products or higher-grade fuels; or 'end of fuelling', with a thank you message, for example. It also allows marketers to promote products based on things such as fuel type and loyalty cards.

Automatic temperature compensation

With fuel margins as tight as ever, many retailers are seeking methods to protect their fuel assets and reduce wet-stock loss. Adding automatic temperature compensation (ATC) to fuel dispensers is proving a success for many.

"ATC today is becoming hugely popular," says Beeby. "We've installed our kits across hundreds of sites here in the UK in the past 12 months and the feedback has been really positive with some superb results. Our customers know the colder the tank temperature the more fuel they may be losing with each sale and, with winters seeming to last even longer of late, they see the value of having one of our kits installed."

Beeby says that a small service station selling 2.5mlpa can potentially save 8,500 litres of fuel at 1.40 a litre, that's almost 12,000 per annum. "Our technology is proving so reliable and so popular that we are now providing retrofit ATC kits for Tokheim legacy dispensers and third-party dispenser models dating back more than 20 years."

While pump manufacturer Wayne is seeing an increasing number of UK retailers retrofit ATC to old equipment, UK sales and marketing manager Soren Powell-Holse says it's not suitable for every site. To assess a site's suitability for ATC, historic data must be carefully analysed. "First we will look at the historic temperature of the tanks and double check that there's not been a recent change in which terminal fuel deliveries have come from. If the latter has happened, all calculations could be made in vain. With historic data we can calculate if savings can be made. We don't want to sell it to unsuitable sites and they end up losing money.

"There are so many variables," adds Powell-Holse. "Which terminal fuel deliveries come from, how deep in the ground storage tanks are, how big the tanks are and how often fuel is circulated, can all affect the temperature at which fuel is sold to the motorist."

Powell-Holse says that of all the new pumps Wayne sells in the dealer market in the UK, 50-60% are with ATC."

What's next?

Wayne launched the Helix range of dispensers in September last year, and is now in the process of doing pilot installs around Europe. The first site in the UK to install Helix is BP's forecourt in Twyford, Berkshire. "We've had really good feedback on Helix," says Powell-Holse. "The pumps are doing really well in Twyford and BP is trying the various different things that the model can do such as advertising promotions via the multi-media screen.

"We still have the GlobalStar dispenser that remains our most popular pump but it will be a gradual transformation to Helix. There will be a period where customers have a choice and we will see what demand there is for the two models."

Gilbarco's John Tierney says that as a result of constantly evolving fuel choices and alternative fuels, forecourts have a preference for dispensers which are future ready, meaning that they can be easily retrofitted with additional grades, options and enhancements.

"The next growth opportunity will clearly be from alternative fuels Adblue, LPG, CNG, LNG and biodiesel. The Renewable Transport Fuel Obligation (RTFO) requires suppliers to incorporate a proportion of biofuel in petrol and diesel, which will drive the requirement for handling higher ethanol and biodiesel contents by pump manufacturers."


Maintenance solutions

There are good deals to be had on pump maintenance and servicing contracts, according to Soren Powel-Holse, marketing manager at Wayne. "There is a lot of competition in the pump maintenance market. Retailers can benefit from this tough competition and get a really good deal on service contracts.
"Preventative maintenance is important some retailers are gambling a bit and just fixing problems when they arise. With regular maintenance it's possible to prolong the life of equipment."