Starting with one of its major markets in the second quarter of 2007, QuikTrip will begin a phased rollout of a debit card that offers discounts to its customers and can be used at 200,000 other US retail outlets that accept payments via Tempo, including Wal-Mart, Sam’s Club and CVS.
Crucially for QuikTrip, Tempo provides card-accepting merchants with a low fee per transaction that is significantly less expensive than traditional credit and debit cards.
Steady increases in bank-issued credit and debit card fees charged to merchants have severely impacted fuel retailers, and the effect of higher petrol costs has exacerbated the issue. As card fees are based on a percentage of the sale, petrol retailers pay a proportionately higher share of their revenue in interchange fees and, subsequently, suffer lower profit margins.
As gasoline prices increased over the past two years, retailers actually made less on each gallon they sold due to the outrageous fees imposed by the credit card companies, said Tempo CEO Mike Grossman. Savvy merchants like QuikTrip are enlisting consumers in the cost-control effort by passing on savings to encourage the use of their own lower-cost debit cards.
