How do fuel cards work? A Detailed Guide

Fuel cards have become an essential tool for businesses managing fleets and controlling fuel expenses. But how do fuel cards work, and what benefits do they offer? In this guide, we’ll explore the ins and outs of fuel cards, their advantages, and how they can streamline your company’s fuel management process.

What is a fuel card?

A fuel card is a specialised payment card designed for purchasing fuel and vehicle-related products and services. They function similarly to bank cards but unlike traditional credit or debit cards, fuel cards are tailored to meet the unique needs of businesses with vehicle fleets. 

How does a fuel card system work?

The process of using a fuel card is straightforward. When a driver needs to refuel, they simply present the fuel card at a participating station. The process typically involves:

• Swiping the card or inserting it into a chip and PIN machine
• Entering the vehicle’s mileage (if required)
• Inputting a unique PIN for security
• Selecting the fuel type and filling up the vehicle

Once the transaction is complete, the fuel purchase is recorded and billed directly to the company account. This eliminates the need for drivers to cover the cost personally and claim expenses later.

How do company fuel cards work for employees?

Company fuel cards work by allowing employees to purchase fuel without using personal funds or company credit cards. Here’s a breakdown of the process:

• The company issues fuel cards to authorised drivers
• Drivers use the cards to buy fuel at approved stations
• Transactions are recorded and sent to the company in real-time
• The company receives a single, itemised invoice for all fuel purchases
• Payment is made directly to the fuel card provider

This system simplifies accounting, reduces the risk of fraud, and provides detailed insights into fuel consumption patterns.

How do fleet fuel cards work?

Fleet fuel cards are designed to manage fuel expenses for multiple vehicles efficiently. They offer additional features tailored to fleet management, such as:

• Customisable spending limits per card or driver
• Restriction of purchases to specific fuel types or products
• Integration with telematics systems for comprehensive reporting
• Access to a wide network of fuel stations

For instance, WEX’s fleet cards provide access to over 95% of fuel stations in the UK, ensuring your drivers can refuel conveniently wherever they are.

What are the benefits of a fuel card?

Fuel cards offer numerous advantages for businesses, including:

According to Gates.co.uk, fuel costs add up to to around 25 percent of the total Whole life cost of any vehicle. By implementing a fuel card system, businesses can significantly reduce these expenses and improve overall efficiency.

Is it worth getting a fuel card?

• For most businesses with a fleet of vehicles, the answer is a resounding yes. Fuel cards simplify expense management, reduce administrative burdens, and offer potential cost savings. However, it’s essential to consider your specific needs:

• Fleet size: Even small fleets can benefit from fuel cards, but larger fleets often see more significant advantages
• Geographic coverage: Ensure the fuel card network aligns with your operational areas
• Additional services: Some cards offer vehicle maintenance and toll payment options
• Reporting needs: Consider the level of detail required for your financial analysis

While fuel cards offer numerous benefits, it’s worth noting that they may have limitations in terms of accepted locations. However, with providers like WEX offering extensive networks, this drawback is often minimal.

Technological advancements in fuel card systems

The fuel card industry is continually evolving, with new technologies enhancing their functionality and user experience. Some recent advancements include:

• Mobile apps: Many providers now offer smartphone apps for real-time account management and station locators
• Telematics integration: Fuel cards can now sync with vehicle tracking systems for comprehensive fleet management
• Contactless payments: Some fuel cards now support contactless transactions for faster refuelling
• Electric vehicle (EV) charging: As fleets transition to EVs, some fuel cards now cover charging costs

For example, WEX’s telematics solutions integrate seamlessly with their fuel card offerings, providing a holistic view of fleet operations and fuel efficiency.

Conclusion

Understanding how fuel cards work is crucial for businesses looking to optimise their fleet management and reduce fuel-related expenses. By leveraging the benefits of fuel cards, companies can streamline their operations, improve cost control, and gain valuable insights into their fuel consumption patterns.

Whether you’re managing a small fleet of company cars or a large logistics operation, implementing a fuel card system can lead to significant improvements in efficiency and cost savings. To explore how WEX fuel card solutions can benefit your business, visit our fleet cards page for more information on our tailored offerings.