We are living in a world where productivity and success are based on speed of manufacturing, speed to market, and speed of distribution. So it makes sense that speed of payment is evolving in a way that is transforming many industries, not the least of which is the trucking industry. Faster fleet payments are a cornerstone of current industry growth, and companies across the globe are looking to technology to enable real-time payment transactions for all areas of operations.
The Shift to Paperless Fleet Payment
Pew Research studies have shown that 96% of all Americans own a smart phone. We are relying on our phones to inform every aspect of our lives. Technology has normalized efficiencies and speed in both our personal lives and our lives at work. And while research may show that paper checks still dominate in business, new research by Citizens Commercial Banking shows that 90 percent of businesses either currently deploy or expect to transition to real-time payments in the future as part of their financial strategy, suggesting that faster payments will become the industry standard – and the biggest change to the U.S. payment system since Automated Clearing House (ACH) in 1974. Instant transactions will improve the way we do business in more ways than one. Instant fleet payments will have a positive impact on drivers and employees while vastly improving business cash-flow and streamlining fleet financials.
Real-time payments are the most sweeping change to the U.S. payment system since the 1970s, and businesses see this as a crucial opportunity to modernize their payment practices. There are tremendous advantages in terms of speed and certainty of payments. Cash flow predictability and payment reconciliation will also be greatly improved. It will be absolutely transformative.
The trucking industry welcomes the shift and has already begun implementing systems. And though financial tech may be foreign to many small to medium-sized fleets, solutions are available to help get them up to speed quickly. Partners like EFS/WEX can provide guidance on fleet financials, particularly where faster payments are concerned. With electronic fleet payment and real-time solutions in place, companies can expect to streamline processes, cut costs, mitigate risk, and generate revenue.
The downside? A huge potential for fraud, which is why financial players have been working hard to develop robust security systems that can mitigate risk in every arena, not just the trucking industry. Companies like IBM and most recently Citi have developed artificial intelligence and machine learning solutions allowing them to analyze behaviors for suspicious activity. Fleet financial systems and WEX are also using A.I. to better determine relevant behavior and actions as real-time payments establish their own activity patterns.
4 Best Practices to Ensure Security for Real-Time Payments
A recent article on Pymnts.com highlights an approach to fraud protection that should be considered by any business using real-time payments.
1. “ENABLE REAL-TIME DECISIONS. Take a holistic look at all risk events, such as new profile registrations or changes, account additions, and money movement transactions. All risk events should be scored in real time, and specific mitigation actions should be deployed based on fraud use case and risk.
2. “LOCK THE FRONT DOOR. Preventing unauthorized access to account information across all channels and processes is crucial. Fraudsters look for ways to take over customers’ accounts, often with compromised online banking credentials, so new account origination processes and online banking access merit specific attention. Review account-opening processes and online banking login controls, and utilize a two-factor authentication tool as part of a multilayered approach.
3. “AUDIT INTERNAL CONTROLS. Fraudsters … often successfully use social engineering techniques to obtain information directly from unsuspecting FI employees. Audit your call center user authentication process to make sure proper protections are in place.
4. “EDUCATE YOUR CUSTOMERS. Educating consumers and frequently reinforcing the importance of taking precautions … when sending money is key.”
Clearly the trucking industry can benefit from these insights, but companies are most likely relying on partners like EFS/WEX to ensure fleet payment security while they focus on the next delivery. Fortunately, the expertise that EFS/WEX has established has been successful in addressing fraud by streamlining the process and presenting more transparency, which, in turn, provides more control. WEX is reinventing the way payments work for the company.
Fleet Payment Working Smarter
- Optimize processes and improve workflow automation
- Reduce cost
- Mitigate risk and protect data with tokenization
- Generate revenue
- Gain detailed transaction data with level-3 processing
- Enrich buyer and supplier relationships
- Better manage and limit spending
Not all companies have the resources to implement the systems they require. Smaller trucking companies struggle to keep up with daily operations, including the cost of fuel, insurance, and payroll. If all of their vendors were up to speed on real-time fleet payment, companies would not suffer the current widespread problem with cash-flow. The lack of immediate compensation has become one of the biggest challenges a trucking company faces.
It’s a very capital-intensive industry. So, by the time you drop a load, you’re already out a lot of … money. To get the next load moving and fuel in the truck, you need to get paid on what you just delivered.
— Brian Calgren, chief strategy officer, Apex Capital
The good news is that there are solutions out there to help, many offered by freight factoring. WEX is part of the fleet financial solution here as well with its offer of cash flow assistance and factoring services. Factoring companies like WEX Fleet One Factoring buy unpaid invoices from trucking companies at discounted prices. This gives truckers quick, sometimes same-day funding. Fleet One then collects revenue once the invoice is paid in full. These factoring solutions have become as beneficial as real-time payments.