EL DORADO, Ark. -- Murphy Oil USA Inc. has signed an agreement with National Payment Card LLC (NPC), an electronic funds payment service bureau that interfaces with point-of-sale (POS) systems, to institute NPC's patent-pending technology that substantially reduces card acceptance costs at selected Murphy Oil USA retail outlets.
When fully deployed, Murphy Oil USA customers in 12 states (Texas, Florida, South Carolina, Virginia, Louisiana, Arkansas, Mississippi, Ohio, Michigan, Wisconsin Minnesota and Iowa) will be able to participate in the program [image-nocss] allowing them to pay at the pump or in-store using a driver's license with a magnetic stripe that will be tied to their checking account.
When the sale is made, an electronic check is debited from the customer's account and is processed through the Federal Reserve Automated Clearing House (ACH), resulting in lower merchant fees and a self-funded loyalty program that provides immediate savings at the pump for consumers.
The vendor settlement is the next business day. The system is cheaper, costing only a fraction of what Murphy normally pays in merchant service fees, NPC said, because the funds come directly from the consumer's bank account, removing the middlemen in the credit card and debit card networks altogether.
Murphy Oil USA said it expects to pass some of that savings directly to consumers. In all, the company has approximately 984 gas stations located in 21 states and it is growing at approximately 10% per year, it said.
Credit card fees are one of our biggest costs and we have been constantly trying to find new and creative ways to reduce their impact on our operation while at the same time seeking ways to build better relationships with our customers, said Bill Deichler, manager of financial services of Murphy Oil USA, El Dorado, Ark.
The driver's license payment program presents a unique opportunity for Murphy Oil USA Inc., giving Murphy an instant card deck for millions of consumers who can enroll in the program without the cost of issuing new cards, said Peter Guidi, vice president of sales for NPC, Baca Raton, Fla. The consumer will have the convenience of a card that is already in their wallet or purse.
According to NPC, there are about 150 million Americans carrying driver's licenses with magnetic stripes across 24 states. Those states represent approximately 61% of the nation's gas stations. Currently, credit card fees represent the third-largest store expense for merchants with 60% to 70% of all purchases involving credit or debit cards.
NPC's charge to merchants is a flat-fee of 15 cents per transaction on a loyalty card and 17 cents on a sale to a third-party card or driver's license. Those figures represent a 60% to 80% savings over the current standard processing fee. Pinnacle Corp, a major POS vendor, has already added NPC to its product payment modules and Verifone has also certified the NPC interface to work with its Ruby/Sapphire POS.
NPC is a marketer of ACH card-based payment systems. Its primary product is the Payment Card, a retailer-branded program that provides consumers access to funds in their checking accounts so they can pay for goods or services. The Payment Card is not a credit or debit card that is linked through the national banking networks, but rather uses a user ID for consumer authentication and is processed through the NPC ACH Payment Card network. A Payment Card can be a loyalty card, a membership card or driver's license. National Payment Card has filed a series of patent applications for methods of payment processing with a driver's license.
Also, NPC is a member of the EFT Network, which is a part of the Electronic Check Council of NACHA, the rule-making body for all electronic funds transfers made through the ACH.
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