How Do Fuel Card Companies Make Money?

If you’re looking into fuel cards you’ll probably see a lot of advertisements saying…

Save up to 15% off!

10¢ off per gallon!

2¢ per gallon monthly rebate!

Then you get fuel card controls, fuel reports, notifications, and customer service on top of the advertised discounts. By now, you’re probably thinking how do fuel card companies make money?

Let’s break down the different profit sources for a fuel card company to show exactly where fuel card companies are making money.

First it’s important to understand that there are two different types of fuel card companies.

1. Fuel Focused Companies
2. Payment Processing Focused Companies

Why is this important?

Fuel focused fuel card companies usually own gas stations or truck stops and are providing a fuel card to service their existing customer base. This in turn drives customers to their stations and helps create little extra revenue when their customers use other locations.

On the other hand payment processing focused companies usually do not own gas stations and are simply in the business to make money on every transaction which is very similar to a credit card company.

Both companies will provide you with a similar service, it just important to help understand the company setups as we get into how fuel card companies make money below.

The first primary source of how fuel card companies make money is merchant rebates. The fuel network says to the gas station owner, if you accept our fuel card can you rebate a 1-4% back on every fuel purchase to the fuel card company.

This pushes fuel card customers to the gas station owner which helps the gas station sell more fuel and c-store items. In return the fuel card company makes 3¢ to 8¢ per gallon on the transaction.

Not all fuel card companies charge fees, but some do. These fees include;

• Transaction fees
• Yearly membership fees
• Card replacement fees
• Account maintenance fees

Sure they may be small fees, two dollars here or two dollars there, but these fees add up over time and can be sizable revenue source for a fuel card company.

Again not all fuel card companies have finance charges or penalties. However it’s worth noting that some of the biggest, well-known fuel card companies have the heftiest finance charges and penalties.

Finance charges are usually a percentage on the outstanding balance similar to what a credit card company charges in interest. If you always pay on time and carry no balance you should never see a finance change, but if you don’t finance charges add up quickly.

Late fees can be hefty. We have heard up to $1,200 for a late fee on one invoice!

This may go without saying, but fuel focused fuel card companies also make money of the gas, diesel, and def that they sell at their gas stations or truck stops.

1) I can’t reiterate this enough, read the fine print.

Not all fuel card companies charge fees, finance charges, or late penalties. Some fuel card companies keep it simple and just charge the price at the pump and give you everything you need to control and track your company’s fuel purchases.

So look around for a company that doesn’t have fees.

2) Don’t fall for the discounts.

Remember those discounts I mentioned at the beginning of this article? Read the fine print because like the age old saying goes, if it’s too good to be true, it probably is.

Some ads we have seen say get 10 cents off per gallon! The you read the fine print and it discount only valid for the the first 1,000 gallons purchased. Is $50 really going to sway your decision when choosing fuel card companies?