Convenience Chain CIO: Payment Systems Bleeding Stores Dry

 
 
By Evan Schuman  |  Posted 2004-11-19 Email Print this article Print
 
 
 
 
 
 
 

At the 550 Wawa convenience stores, the chain's CIO says credit card companies are profiteering.

Wawa CIO Neil McCarthys voice reveals his anger as he recounts a recent meeting he had with bank executives to complain about high credit card fees that are out of proportion with services. Wawas 550 stores sell a huge amount of gasoline: about 110,000 gallons per week per store, which places it among the highest volume in the country. Typical volume for U.S. gas stations is about 40,000 gallons, McCarthy said. Soaring gas prices have doubled the typical fuel bill, meaning that the same gallons of gas are being pumped and sold, but the credit card company is taking double the money.
"Youre killing us with these fees, I told them. And they nodded and said, Yeah, we hear you. Were not going to do anything about it, but we hear you."
Thats when the CIO made a new priority of exploring payment system options. Retail payment system choices have become much more numerous in the last few years, with contactless readers that more easily integrate with POS, chip-embedded smartcards, keyfobs, and even the ability to use a customers own cell phone or PDA as an impromptu payment device.
But these alternatives are becoming especially attractive in areas—such as convenience store chains like Wawa—that have historically been dominated by cash and, to a much lesser extent, debit.Many of these systems pitch CRM (customer relationship management) integration as a key selling point, but McCarthy doesnt see that as an issue for his customers. Staples does consider CRM important for its customers and has integrated it with its rebate program. To read more, click here. Contactless payment system vendors and banks "were touting CRM, but our average ticket is $3 or $4. Our customers tell us, We dont want the gimmicks. We dont want the loyalty programs." Next Page: Customers want convenience.



 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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