Today, many gas stations add a fee when motorists pay for fuel with a plastic card. Royal Dutch Shell PLC is ramping up promotion on an alternative: pay with the decoupled debit card it introduced in 2009 and save two cents a gallon.

Shell was among the first major oil retailers to use First Data's Telecheck system to allow customers to save money by paying with a card that withdraws funds from a linked checking account via automated clearing house transfer.

Such cards have grown in popularity through the years and First Data continues to see volume increase on its ACH products, says Paul Cwalina, senior vice president of national accounts at First Data Corp. "We're still very pleased with it, and I am sure Shell is happy, too."

Shell on Feb. 20 announced its latest promotion for Shell Saver Card users: a WINsday promotion tied into NASCAR racing. Each time 22-year-old driver Joe Logano, who drives the No. 22 Shell-Pennzoil Ford Fusion, wins a points race during the 2013 season, cardholders get 22 cents per gallon off their purchase on the following Wednesday.

Shell did not respond to inquiries prior to deadline.
First Data expects to make inroads into the grocery store market as well with its cards, Cwalina says. "We are not too far from landing a significant grocery store chain."

First Data had a "learning curve" when first issuing cards and setting up PINs for the ACH products, Cwalina says. "There was a fraud challenge, but we shored up the way we handle that and fraud instances for the merchant are greatly reduced," he adds.

The card users provide a PIN to initiate a transaction, and most gas stations have incorporated PIN pads and address verification at the pump.

The Shell Saver Card transactions and others like it "run on the Telecheck [electronic checking] rails, and that's a huge competitive advantage for First Data," Cwalina says. "We just see Telecheck as a great product, and the merchants see real value in it as a way to combat the ever-increasing fees for other cards."

Telecheck is a perfect example of a service that has found creative ways to "wrap authorization around ACH" and offer an attractive price for merchants, says Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm.

"It's an alternative to traditional PIN debit and a unique way to support authentication and authorization," Arminio says. "Companies like Telecheck are on top of their game with all types of credit screening capabilities," she adds.

One of the original risks with ACH remains that, unlike with debit or prepaid accounts, the merchant can't be sure the consumer's money is available before the transaction is authorized, Arminio says.

"We're still not near real-time settlement, but a service like Telecheck can provide a lot more information that allows better judgments to take place about a particular transaction," she says.

Some decoupled debit programs have failed in the past because the providers were tying programs too closely to the payments pieces, rather than the loyalty programs, Arminio says.

"Loyalty programs drive the decoupled debit and ACH undertaking, not the payment method," she says.

It is hard for ACH programs to grow substantially because merchants generally don't come together and share data, Arminio says.

In the meantime, companies have to keep close tabs on where delivery of ACH and decoupled debit is heading.

Because payments technology is changing quickly, First Data is reviewing "any and all technology options" in regards to how decoupled debit may be delivered in the future, Cwalina says.

The National Payment Card Association has recently pushed decoupled debit as a function for mobile wallets.

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