The Future of Energy Retail: How Mobile Payments are Changing the Game

Energy retailers are facing rapid changes in mobile payment trends due to customers' increasing demands for convenience and rewards from their transactions. With innovative services and products like convenience retail, EV charging, and solutions for connected vehicles, energy retailers can tap into large value pools. Achieving success in this competitive market, however, will require rethinking their strategies.

Philippe Meyer

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Energy retailers are facing rapid changes in mobile paymenttrends due to customers' increasing demands for convenience and rewards fromtheir transactions. With innovative services and products like convenienceretail, EV charging, and solutions for connected vehicles, energy retailers cantap into large value pools. Achieving success in this competitive market,however, will require rethinking their strategies.

Using a smartphone to pay for fuel is not a new concept inthe industry. Drivers have been paying at the pump for years with QR codes, NFC devices, or dedicated apps on their smartphones. Mobile payment adoption has, however, been uneven and slow across different markets and regions. Industry analystssay only 23% of fuel customers globally use mobile payment at least once amonth. 42% have never used it at all.

Full mobile acceptance is a growing trend though, as moreconsumers prefer to pay with their smartphones instead of carrying cash or queuing in stores. Analysts predict that mobile payments for fuel purchases will reach 85 billion € by 2025, up from 20 billion € in 2020. This representsa compound annual growth rate of 33%.

There are substantial benefits - but also challenges - that energy retailers should address to further succeed in the evolving market. These include understanding customer expectations and developing customer-centric strategies, embracing new mobility behaviors and investing in innovative technologies to stay ahead of their competition.

What are the driving forces behindmobile payments for energy retailers?

Let’s explore some of these trends and their implicationsfor both energy retailers and customers.

1.   Firstly, it is the changing behavior of customers. Permanently connected and informed drivershave developed clear expectations of service levels, availability, choice, and (access) convenience. All these elements are driving energy retailers to adoptdigital capabilities, regardless of their size.

2.   Connected vehicles, which are able to communicate with fuel stations and allow seamlessand personalized transactions, are another key driver. Connected vehicles can automatically identify the best fuel station based on price, location, and real-time promotions - and influence the drivers’ journey.

3.   The energy transition is also clearly impacting mobility preferences. The massiverise of new electric vehicles registrations are also important factors driving mobile payment adoption. On the upside, with electric vehicle charging, energy retailers can rethink their business model and offer value-added services such as dynamic pricing, reservation systems, as well as encouraging customers to stay longer and buy more food and drinks with appealing offers.

Energy retailers’ next big thing: connected vehicles

The ongoing development of connected vehicles could be amajor driver of mobile payment adoption. These cars are capable of communicating with other devices (for example a fuel pump, a charging pole or a POS terminal) via the internet. Statista predicts that the global market forthe related services of connected vehicles will surge from 19 billion € in 2018to 88 billion € in 2025.

Connected vehicles present an additional channel for mobile payments, which could increase convenience for customers. Drivers no longer have to use their smartphones; they can pay for their purchase from their car’s dashboard without leaving their vehicle or having to deal with cash or cards. Furthermore, the car can identify the most attractive fuel price based on the customer’s preferences, requirements and where abouts, and also display appealing promotions to the screen inside the vehicle.

For energy retailers, connected vehicles present a big opportunity to build tighter relationships through personalization. Data gathered from the vehicles could be used to fashion tailored services or recommendations that suit the drivers’ preferences and fueling behavior. This might involve sending timely reminders when their fuel is running low, highlighting nearby fuel stations offering discount or rewards, or recommending complementary services, such as car wash, maintenance or on-site restauration pending on the time of the day or the length of the stop.

No pain, no gain

As attractive and beneficial connected vehicles can be for energy retailers, they also come with some challenges. Without direct customer contactor loyalty through an app or staff, it could be difficult to engage with drivers. Furthermore, since connected customers are able to easily compare prices across different options, this could lead inevitably to higher competition among retailers and let drivers switch to where the best offerlies.

To get past these challenges, energy retailers need toadopt a customer-centric approach that focuses on delivering value-added services and great customer experiences that go beyond “purchasing energy”. By offering unique incentives and benefits that encourage customer acquisition, loyalty and retention, retailers can differentiate themselves from their competitors.

Interoperability through agnosticplatforms

The lack of standardization and interoperability among different POS terminals, fueling equipment and payment providers is one of themajor barriers to mobile payment adoption. To benefit from mobile payment at different fuel stations, customers often need to download multiple apps and register for various loyalty programs. Consequently, drivers do not use mobilepayment often due to a difficult and complicated process and a fragmented and inconvenient user experience.

But new trends and technologies are likely to transform the mobile payment landscape in the energy retail industry in the near future.

One trend that will positively impact mobile payment adoption is the availability of agnostic platforms that can connect to any fuel pump or electric vehicle charger, regardless of the brand, provider or POS terminals. Through a third-party platform, customers can use their preferred app(s) to pay for fuel, without downloading multiple apps or registering formultiple loyalty programs. Agnostic platforms act as real business brokers between customers and fuel retailers.

Mobile Payments in energy retail: a win-win for consumers and retailers

If energy retailers want tostay competitive and relevant in the digital age, accepting mobile payments isnot a trend, but a necessity. Once looked beyond the immediate “cost” side of mobile transactions vs. classic in-shop payments, retailers realize how muchthey could increase revenues, reduce costs, and improve customer loyalty byoffering drivers mobile payment options.

1.   Mobile payment can enhance customer loyalty and experience at forecourts by making them faster, easier, and more personalized, reducing waiting times andqueues, as well as encouraging repeat customers to spend more. Additionally, energy retailers can use it to boost customer loyalty and retention by offering customized promotions, discounts, coupons, and rewards.

2.   Believe it or not, but mobile payment reduces operational costs by reducing cash handling, reconciliation, and fraud losses. A mobile payment system also partially decreases the need for card readers, paper receipts, and cash handling, which reduces labor and maintenance costs.

3.   By providing personalized special offers and excellent customer service, mobile payments can help energy retailers stand out from the crowd of competitors. Through effective use of digital marketing, they can also innovate and create new business models and revenue streams - or diversify by providing servicessuch as last-mile delivery and electric vehicle charging stations.


Commercial road transport (CRT): anindustry in digital motion

But it’s not all about Peter, Paul and personal retailalone. The digital transformation - and especially mobile payments - are also massively seducing the CRT sector. The digitization of fuel cards is a trend that is expected to grow in the coming years as more drivers and fleet managers adopt digital solutions for their energy needs.

It allows drivers to store their fuel cards digitally, access them from anywhere, choose from multiple payment options and enjoy aspeedy, seamless and contactless experience, while also having the personal benefits of loyalty rewards from participating stations and merchants.

For fleet managers, it means more efficiency, control, andinsight. They can issue or replace digital cards instantaneously, monitor and manage their fuel card usage online, track driver behavior and performance, andgenerate reports and analytics… in real time.

Pushing evolution one notch further, the embedding ofdigitized fuel cards into telematics solutions will definitely leave a lasting shape on the energy and transportation industries. It creates an entire ecosystem that offers new opportunities for innovation and collaboration among card providers, station operators, technology companies, commercial fleets,OEMs and other stakeholders.

Getting from A to B

However, truth to be told, the energy retail industry also facessome challenges to adopting mobile payment solutions, among which

1.   Retailers need to understand the needs and expectations of drivers before they can become their customers. Nowadays, drivers of all kinds may prefer different payment methods, loyalty programs, rewards, and conveniences. They should educateand motivate their customers to use mobile payment solutions and over comeresistance or their (own) inertia.

2.   Energy retailers need to invest in upgrading existing infrastructure and connecting mobile payment systems with POS terminals, back-end systems and third-partyservice providers to take advantage of maximum coverage and avoid locking themselves up with …already known and acquired customers.

3.   Asa last point, energy retailers must also embrace the changing dynamics ofthe payment landscape, its actors, revisited fee structures, but also understand the possible rewards associated with digital payments and larger pools of (bundled) services. In order to take advantage of new opportunities, energy retailers must (re)learn to pay transaction fees and commissions charged by mobile payment platforms and intermediaries and factor in the concept of opportunity costs” beyond just “payment fees”.


In conclusion, mobile payment trends in fuel retailbusiness are influenced by changing customer preferences and expectations, aswell as technological advances in the mobility sector. Energy retailers who can leverage mobile payments to offer more convenience, security, and value totheir customers will have a competitive edge in the future.