"The Fuel Market Is Even More Demanding Than the Banking Market"
Any company that not only wants to become a market leader but to maintain its position in the short and long term must constantly examine its development and work to stay ahead. LUKOIL-Inter-Card, currently a leader in the fuel cards market in Russia and the CIS, made its choice for processing two years ago and today can say with conviction that the WAY4 platform turned out to be the optimal and strategically correct solution.
Nikolai Yashin, IT director at LUKOIL-Inter-Card, comes to this conclusion in his interview.
Often the end user of products and services only sees the tip of the iceberg. For example, fuel cards are convenient and simple. But there is a lot more "under the water". A number of criteria influence a client's choice of a service provider, and for someone to favour a particular company, the provider must put in a lot of effort, creating a unique system for recording, controlling, monitoring and protecting information. It is the goal of LUKOIL-Inter- Card (LICARD) to provide a full range of services in this segment and make them as accessible as possible, implemented at the highest level, convenient and efficient for the consumer.
What were the factors that required LICARD to migrate to a new processing system?
N. Yashin: The system we were using two years ago for card transaction processing was already operating to the full extent of its possibilities. We were growing and developing as a company and the processing system was practically at the end of its resources. Naturally, the question arose – what will we replace it with, or, in technical terms, what will we migrate to? Among functionality requirements for the new system, we singled out the following: online and offline support of all card types (fuel, bank, loyalty), full itemized accounting for all card transactions, support of a flexible settlement system for those clients that we serve on special terms, and the existence of one of the most in-demand and cutting edge innovations – the possibility to acquire contactless NFC cards. This function is now available at LUKOIL filling stations in 65 regions of Russia.
You came to LICARD from the banking sector. What differences exist between processing requirements in the banking and in the fuel sector?
N. Yashin: In my own opinion, there are no critical differences, but each sector has its own specifics. For example, in Russia bank card issuing is directed predominantly at individuals. On the other hand, fuel cards are a corporate product, and this is connected with a huge volume of back office work. Moreover, in the fuel sector, integration with control systems at filling stations as a whole and with tills in particular is an absolute necessity. PIN pads installed in Russian shopping centres are still rarely directly integrated with tills.
In our case, constant interaction with clients from the filling station business is a necessity; we can't just make a transaction at a fixed price. We're interested in flexible pricing that can be defined for the client on the basis of a number of factors – for example, volume, number and types of transactions for a certain period. It's important for us that our system can correctly and quickly generate documents for a client, including full reports: not only provide a breakdown of what was purchased using a card and when, but of VAT as well. This logic resembles the European practice with corporate cards, but is more interesting and difficult with regard to calculating prices.
How did you choose a processing solution vendor?
N. Yashin: It wasn't easy. There was no ready solution on the market and we understood that we were in for a long round of negotiations with all the main vendors. We understood from the beginning that an "off-the-shelf" solution wouldn't work for us. We required a team that could in a rather tight schedule provide us business implementation based on its solution and demonstrate the most professional approach, guarantee stability and reliability. The vendor's reputation was also an important factor.
OpenWay showed the most desire to participate in this complex case and the highest level of immersion in the subject even before the project started. Not only did we get an adaptive solution, we got a professional team that worked very efficiently: implementation took three months.
In general, LICARD's development strategy for the next few years is based on adaptability and we pay great attention to upgrading our IT architecture. The WAY4 processing system, well known to the banking market, has become an important part of this strategy. Since the fuel market is even more demanding than the banking market with regard to implementation of new products, we need to be able to create new system functionality independently, without contacting the vendor each time.
Speaking of reliability criteria for LICARD, how do you see this concept?
N. Yashin: System downtime is critical for us, since it threatens us with a penalty or sanctions, as our clients are legal entities. If, for example, a private individual wasn't able to pay by card once in a supermarket, it's not such a big deal; the client can wait and try again. An ambulance, however, can't sit and wait for an hour at a filling station. Many of our clients are state-funded organisations for which downtime is not an option. Therefore the system that we chose has to operate in "always" mode. To ensure absolutely no downtime, we built a strict system of regulations for upgrades and rules for monitoring operation of the system 24/7. When evaluating WAY4 functionality, we consulted with various banks that use the system and got only positive feedback. As time has shown, we made the strategically correct choice. The WAY4 solution is built on an open cluster platform, scales from compact to high- performance systems with support of more than 3000 transaction/second and 150 million cards.
LUKOIL-Inter-Card (LLC Licard), a subsidiary of LUKOIL, is an operator for the development and implementation of cashless payments for fuel at LUKOIL filling stations using plastic cards. Holds a leading position on the fuel cards market in Russia and the CIS. More than 18 years of successful work with Russian and foreign clients.
Has a wide service network of more than 3,700 filling stations at which LUKOIL fuel cards, bank cards and loyalty cards are accepted in 65 regions of Russia as well as in Ukraine, Belarus, Moldova, Azerbaijan, Latvia, Lithuania, Estonia, Poland, the Czech Republic, Hungary, Slovakia, Belgium, Bulgaria, Romania and Serbia. Work is currently under way to develop the LICARD system in the Netherlands, Turkey and Georgia.
Thanks to modern processing, the company provides quality and efficient service. The time of card authorization does not exceed 2 seconds, and the full time of client service – 20 seconds.
There are currently more than 700,000 LUKOIL fuel cards in circulation and approximately 3.5 million LUKOIL loyalty cards. LUKOIL's fuel cares are used by more than 75 thousand corporate clients. The network of terminals at LUKOIL filling stations includes 5,170 devices.
LUKOIL's share of the filling station market in Russia is 23%, the company's presence is strongest in the Yuzhniy and Privolzhskiy Federal Districts – 29.6% and 25.7%, respectively.