INTERIM PROJECT REPORT ON

P a g e | 1

“OPTIMIZATION OF FLEET CARD MANAGEMENT (XTRAPOWER)

PROCESS IN INDIANOIL.”

PROJECT STARTING DATE: 23 FEB 2009

DATE OF SUBMISSION: 18 APRIL 2009

BY: MADHU JAIN (08BSHYD0387) MOBILE NO: +91 9989509443

INDIANOIL CORPORATION LIMITED ( INDIAN OIL BHAVAN, G-9, ALI YAVAR JUNG MARG, BANDRA (E) , MUMBAI-400 051)

FACULTY GUIDE:

Mr. S.V. Bidwai.

Professor (IBS, Hyderabad)

PROJECT CO-ORDINATOR:

Shri V. N. Garg

DGM (Finance) HO,

Ph. No. 022- 2644 7430

PROJECT MENTOR:

Mr. Moni Chakraborty

Manager (Finance) HO,

Ph. No. 022- 2644 7435

INTERIM PROJECT REPORT ON

P a g e | 2

“OPTIMIZATION OF FLEET CARD MANAGEMENT (XTRAPOWER)

PROCESS IN INDIANOIL.”

ICFAI BUSINESS SCHOOL, HYDERABAD

BY: MADHU JAIN (08BSHYD0387)

An interim report submitted in partial fulfillment of

the requirements of

Summer Internship Program.

CONTENTS

INTERIM PROJECT REPORT ON ..................................................................................................... 1

Indianoil Corporation Limited (INDIAN OIL BHAVAN, G-9, ALI YAVAR JUNG MARG, BANDRA (E), MUMBAI-400 051) ........................................................................................................................ 1

PROJECT STARTING DATE: 23 FEB 2009 .............................. 1

DATE OF SUBMISSION: 18 APRIL 2009 ................................................................ 1

INTERIM PROJECT REPORT ON ..................................................................................................... 2

ICFAI BUSINESS SCHOOL, HYDERABAD .......................................... 2

Contents .................................................................................. 3

Abstract ....................................................................................................................................... 4

Section-1: Background ................................................................................................................. 5

1.1 about iocl ..................................................... 5

operating structure ...................................................................................................................... 5

iocl products ................................................................................................................................ 5

Section-2 INTRODUCTION ............................................................................................................ 6

2.1 CUSTOMER LOYALTY PROGRAMS IN INDIANoil: ...................................................................... 6

1.2 IOCL’s xtrapower .................................................................................................................... 7

2.3. XTRAPOWER Features, Objectives, & Benefits .................................................................... 10

3.1. Parties to the program ........................................................................................................ 12

3.2. Business process ................................................................................................................. 16

3.2. a. Online Registration ........................................................................................................ 17

3.2. a. Offline Registration ........................................................................................................ 20

3.2. c. personalization ................................................................................................................ 24

3.2. d. user pin change .............................................................................................................. 27

3.2. e. reload .............................................................................................................................. 28

3.2. h. sale .............................................................................................................................. 37

3.2. i. void ................................................................................................................................. 41

3.2. a. end-of-day/batch settlement .......................................................................................... 43

P a g e | 3

3.2. j. hot listing ........................................................................................................................ 47

4.2. references ........................................................................................................................... 49

ABSTRACT

On March 2004, IOCL launched a loyalty program based smart card called ”XTRAPOWER FLEET CARD”

designed specifically for the Fleet Operators and Corporate Customers. Fleet Card program facilitates

fleet Operators to carry out cashless transactions for purchase of Fuels/Lubes at the designated Retail

Outlet of IndianOil and to keep track of mileage, fuel consumption and vehicle performance. Fleet Card

has two variants viz. Prepaid and Credit. The value proposition to the Customer in this program is

flexible payment options including credit, centralized billing, reward points, and various reports.

Concurrently, the inbuilt yellow-colored microchip in the Fleet Card helps in identifying the customer

with every transactions of purchase recorded by the web and relevant details posted on the net at the

Central Server monitored by a German based Software Company and Service Provider of IOCL, AXALTO.

As per the stringent guidelines drawn by Shri V. N. Garg, DGM (Finance, IOCL), the project confines

specifically and categorically to the practical application, operational, and execution of the Fleet Card

program of IOCL on the web devoid of its technical software installation. The Scope of my project entails

Optimization of the Fleet Card Management (Xtrapower) process of IndianOil. In depth study and

analysis of IOCL Fleet card processes and overall approach in the market in terms of carrying out

cashless transactions for purchase of fuel/lubes, covers the following areas in my interim report

presentation.

• Online and manual enrollment by a customer to the Fleet Card Program.

• Personalization process based on the information about the customer in the application form.

• Activation of the Fleet Card issued to the Customer.

• Manual and online reload process to recharge the Fleet card.

• Sales process at the Retail Outlet of IndianOil using the Fleet Card having value in it.

• Void process in case wrong sales transaction entry done by the Retail Outlet.

P a g e | 4

• Settlement process of daily Fleet Card sales by the Retail Outlet of IndianOil.

• Hot listing process in case Fleet Card is stolen, lost or mutilated by the Customer.

SECTION-1: BACKGROUND

1.1 ABOUT IOCL

Indian Oil Corporation is India’s largest commercial enterprise, ranking 116th on the Fortune Global 500

listing (2008). It began operation in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was

formed in 1964, with the merger of Indian Refineries Ltd. Indian Oil and its subsidiaries account for 47%

share in petroleum products market, 40.4% share in refining capacity and 67% downstream sector

pipelines capacity in India. The Indian Oil Group of Companies owns and operates 10 of India's 19

refineries with a combined refining capacity of 60.2 million metric tons per annum. Indian Oil also

operates the largest and the widest network of fuel stations in the country, numbering about 16,600.

The company has retained its financial position in the market where the times have been quite tough in

terms of the volatile crude oil prices, intensifying competition, etc. It is the frontrunner petroleum

downstream company of India (Oil & Gas category) in the Financial Express's 'FE 500' listing released for

the year end 2008. It has been ranked in the top slot in the Business Week’s Top Companies for 2008-

09.

OPERATING STRUCTURE

IOCL PRODUCTS

Indian Oil's product range covers petrol, diesel, LPG, auto LPG, aviation turbine fuel, lubricants, naphtha,

bitumen, paraffin, kerosene etc. Some of the prominent brands of IOCL are Xtra Premium branded

petrol, Xtra Mile high-speed diesel, Servo lubricants, Indane LPG, Auto gas LPG, and Indian Oil Aviation.

P a g e | 5

Downstream Operations

Refining

Pipeline

Transportation

Fuel Marketing

Research and Development

SECTION-2 INTRODUCTION

2.1 CUSTOMER LOYALTY PROGRAMS IN INDIANOIL:

In India, in the field of marketing generally and more specifically in the field of retailing, a Loyalty Card is

a plastic card, visually similar to a credit card or a debit card, that identifies the card holder as a

member in a commercial incentive programme. Retail establishment or a retail group may issue a

loyalty card to a customer who in turn can use it for identification while dealing with the retailer on

commercial aspect. By presenting the card, the customer/card holder is typically entitled to either a

discount on the current purchase or an allotment of Loyalty Points that can be used for future purchases.

For the petroleum retail sector in India, recent years have exhibited fundamental changes in the way

business is being done. With the deregulation of the sector has seen itself exposed to the new market

forces. The competitive threat has increased in length and breadth. With the private players entering the

fray, the pricing is increasingly market driven and customers are demanding more. With the competition

becoming unbendable, the smarter players have realized that the best way to do business is to lock the

customers into a habit they cannot break.

P a g e | 6

1.2 IOCL’S XTRAPOWER

2.2.C. “XTRA POWER” -PROGRAM DETAIL

With the dismantling of Administered Price Mechanism on 1st April 2002, the marketing of transportation fuels has been opened for

private players in the domestic as well as international sector. The surge in automobile sales has led to significant investments being

made to develop and expand the petroleum retail market. According to US-based consultancy Keystone, automobile sales that

number about a million vehicles is likely to grow to about 20 million a year by 2030, making India, the third largest automobile

market in the world.

Earlier all the fuels and lubes transactions were done in cash, which posed inconvenience to both the

customers and the dealers. This was one of the primary reasons behind the launch of Fleet Program in

India. The pioneer in the field of fleet Card was BPCL (Bharat Petroleum Corporation Limited) with its

“Smart Card”-based Petro Bonus Program launched in September 1999. Indian Oil Corporation Limited

did not enter the field of loyalty program until mid 2002. IOCL was exclusively focusing their initial

marketing efforts largely on building retail outlet brand and services before launching a range of card-

based programs like BPCL. In the Transport (Roadways) Sector, market share of IOCL and its domestic &

private competitors is shown below:

In order to keep its market share and customer base intact, in March 2004 IOCL launched a loyalty

program based smart card called ”XTRAPOWER FLEET CARD” for the Fleet Operators, wherein they can

make purchase at designated ROs(Retail Outlet of IOCL). This debit and credit card based program

P a g e | 7

offered the customers all the facilities of a regular debit/credit card in addition to a host of specific

services including transaction fees waiver, surcharge waiver, insurance coverage, discounts, increased

points earning opportunities, fuel for loyalty points etc. this program leveraged the wide acceptance of

the credit/debit card as a payment device and an established reader network.

Thus, Xtrapower Fleet Card Program of IndianOil has been launched in two variants: Prepaid & Credit.

The Credit form of the Fleet Card has been launched in association with Sundaram Finance Limited (SFL)

with the objective of increasing the loyalty of the commercial vehicle owners / operators & corporate to

exclusively patronize IOCL Retail Outlets for meeting their requirements of automotive fuels and lubes.

Fleet Card transactions were started in April 2004. A survey was done by the Marketing team of IOC,

which shows the percentage of enrollment with the Fleet Card Program (shown below):

Every time customer fills the fleet with fuel and lubes (lubricants) using their Xtrapower fleet Card at the

designated ROs of IOC, they earn loyalty points also called XTRA points. These XTRA points can be

exchanged either with lucrative gifts from XTRAPOWER Rewards Catalogue or can be redeemed into free

fuel and lubes. Earlier 5 points were awarded on Rs. 100 worth purchase of fuel/lubes, which has now

changed to 30 points. The monetary value of each point was 8 paise initially but now it has changed to 1

paise per point.

Once the enrollment is through for the Fleet Card Membership, the Customer is provided with two types

of cards i.e. Fleet Card and Fleet Control Card. Fleet Control Card is a token card issued to all the Card

P a g e | 8

51%

25%

15%

15%

Enrollment with Fleet Card Program

IOCL BPCLHPCLReliance

Members enrolled under XTRAPOWER Fleet Card Program. The Fleet Control Card contains Customer

Name, Control Card Number and Customer ID.

If at any point of time, a card member decides to enroll more vehicles under the Fleet Card Program, the

card member has to fill a small application form giving the details of the additional vehicles to be

enrolled under the program. The membership of the Card Member for XTRAPOWER Fleet Card is

applicable for a period of one year from the date of card issuance. One can renew the membership by

paying the annual fees.

The XTRAPOWER Fleet Card is sent to the Card Member in a dormant condition. This is done essentially

to protect the Card Member against any misuse of his/her fleet card(s) before he/she actually receives

them. To activate the XTRAPOWER card one needs to move to the nearby-designated RO (Retail Outlet)

of IOCL. The Fleet Cards are activated by changing the default PIN on the card terminal at a RO of IOCL.

Once the card is activated, Card Member can easily control his/her fuel/lubes expenses better through

the different limits prescribed by the IOCL applicable to each of the fleet card (explained later).

It is mandatory to specify the above-mentioned card limits in the application forms or else the

application form will be treated as incomplete. The limits on the card can however be changed

subsequently by giving a written request to the Fleet Marketing Officer.

P a g e | 9

FRONT VIEW OF THE XTRAPOWER FLEET CARD

Once the Card is issued the swiping machine reads the “smart yellow colored chip” present on the left

upper corner of the Fleet card. Except the Smart Chip all information present on the card are embossed

on the card once the Card is sent to personalization centre for data personalization after the interested

customer enroll to the program.

The back portion of the card does not contain any vital information of XTRA importance. It only imparts

the IndianOil’s toll-free customer helpline i.e. 1600 425 5599.

2.3. XTRAPOWER FEATURES, OBJECTIVES, & BENEFITS

P a g e | 10

BACK VIEW OF THE XTRAPOWER FLEET CARD

2.3. A. FEATURE OF FLEET CARD PROGRAM :

• Fleet Card Program covers two variants VIZ. Prepaid Card & Credit Card. Under the Prepaid Card

system, the Card Member has to first reload the card with money and then use the card. Under

Credit Card system, Credit partner of IOCL i.e. Sundaram Finance Limited extends credit to Card

Members for purchase of fuel/lubes through Fleet Card.

• XTRAPOWER Fleet Card is usage as well as vehicle specific which states that the Card must be

used for the purpose of purchasing fuel/lubes for the automobile for which the card has been

issued. This is for the control of the Card Member on the expense incurred on fuel/lubes

(lubricants) and to keep track of the transaction on each of his fleet vehicles, which are enrolled

under the said program.

• It provides flexible options for Cash Loading at Designated ROs (Retail Outlet) of Indian Oil. Hence,

the two Options are –Offline Reload (individual reload of card), where reloading is done manually &

CCMS (Customer Cash Management System) Reload (Remote reload of cards through lump sum

deposit of cash at a convenient place), also known as online reload.

• It facilitates Card to Card Fund Transfer for the convenience of the Customers.

• Under this program, the XTRAPOWER membership is valid for a period of one year from the date of

card issuance. One can renew his membership by the annual fees.

• It offers option of Credit, for instance, through Credit Partner like Sundaram Finance Limited.

• It gives provision for Different Limits on the Card – Transaction Limit, Daily Limit, Cash Purse Limit

& Monthly Limit.

• Transaction Slip for every Transaction undertaken on Fleet Card. Every time the customer vehicle

makes a purchase of fuel/lubes at the designated ROs of IOC, a transaction slip is generated. The

transaction slip contains the date and time of the purchase, the value of the purchase and the

reading of the odometer at the designated ROs of the IOC.

• It gives attractive Rewards Program, for example, 30 XTRA Points per Rs 100 purchase of Fuel @1p

i.e 0.3%.

P a g e | 11

• It introduces wide-range of Reward Items including Fuel / Lubes from the XTRAPOWER reward

catalogue managed by Royal Image.

• Enrollment for additional Fleet Card(s) can be done at any point of time. For this, the customer

needs to fill up an application form giving details of the additional vehicles to be enrolled.

• XTRAPOWER gives free Personal Accident Insurance (Rs 1 Lac per Card, Max. Rs 20 Lac) for Card

member and Vehicle Crew (Driver – Rs. 50,000, Co-Driver – Rs. 25,000). Also Lost Card Liability

Cover (Max. Rs. 16,000).

• Fleet Owner are provided with mediclaim of Rs. 2500/- Per card (Max – Rs 50000/-), and Vehicle

Crew a sum of Rs. 2500.

• IOCs Fleet Program imparts instant Redemption of XTRA Points for Fuel & Lube.

• It also provides a dedicated website for customer grievance handling i.e. www.iocxtrapower.com .

• It also shares a Toll-free Customer Helpline i.e. 1800 425 5599 which can be accessed by the card

members and the public at large.

2.3. B. OBJECTIVE OF THE IOCL BEHIND LAUNCHING THIS PROGRAM:

• As per the law of land, cash transaction beyond Rs. 50, 000 was not allowed. Therefore, to

overcome it IndianOil launched the Smart Card system.

• To preserve & increase its market share (i.e. 51% in the Transport Sector in the Year 2008-09).

• To retain and expand the existing customer base (3, 70, 000 Customers in the Year 2008-09 and

is expected to increase by 50,000 Customers in the Year 2009-10).

• To boost the revenue and profitability by accelerating the sales (Revenue= Rs. 12,183 Crores for

2008-09; Profit Margin= Rs. 350 Crores for 2008-09).

SECTION-3 XTRAPOWER-BUSINESS PROCESS

3.1. PARTIES TO THE PROGRAM

This section deals with the various parties/business entities involved in the program.

P a g e | 12

3.1. A. PROGRAM MANAGER:

IOC is the program manager, which is the owner, sponsorer, and promoter of the Fleet card program.

Its functions in the Fleet Card Program are enlisted below:

• Defining the function of the program.

• Defining the Business rules of the program.

• Appointing the operational partner of the program.

• Identifying the trading partner of the program like Card issuers, merchant Acquirers, Card

members etc.

• Providing settlement services between issuers and the acquirers.

3.1. B. CARD ISSUERS:

Card issuers issue fleet Card to the members enrolled to the program. Under this Program IOCL is the

card issuer.

Its functions in the Fleet Card Program are enlisted below:

• Identification and enrollment of the card members

• Verification of card member’s detail.

• Management of card Holder and Card member’s database.

• Personalization of smart Cards.

• Hot list management for Card Holders and card members.

3.1. C. MERCHANT ACQUIRER:

Merchant acquirer acquires merchants for the fleet Card program and is responsible for transactions at

the Merchant’s end. It also takes cares of the Campaign on behalf of the Card issuer. IOCL is the

merchant acquirer in this program.

Its functions in the Fleet Card Program are enlisted below:

P a g e | 13

• Identification and enrollment of merchants/retail outlets in the program.

• Management of the merchant database.

• Settlement of the merchants.

• Maintain the Retail outlet also called POST.

3.1. D. MERCHANT:

Merchant is the provider of service for issuer’s products and has a POST(s) installed at his premise.

Batch settlement is done by the merchant on POST to transfer transactions from POST to Acquirer. Thus,

IOCL retail Outlet having the POST installed will be the merchant in this scheme.

3.1. E. CARD MEMBERS:

Fleet Operators and the corporate customers are the card members in this program.

Its functions in the Fleet Card Program are enlisted below:

• Identification of vehicles for Fleet Card.

• Distribution and management of these Cards.

• Arrange for prepaid or credit facility on the cards for its Card Holder through self-finance

or through any credit partners.

• Defining limits for the Card Holders within this scheme.

3.1. F. CARD HOLDERS:

Card Holder is the end user, typically the truck driver or a taxi driver who actually uses the Fleet Card for

purchasing IOC products offered by the merchant.

P a g e | 14

3.1. G. CREDIT PARTNERS:

Credit Partners are both banking (like HDFC bank) and non-banking financial institutions, which provide

credit to the card members like Sundaram Finance limited.

The role of credit partners are:

• Provision of credit.

• Risk management related to credit.

• Collection of payments from the card members.

• Reconciliation and settlement of financial transactions with the acquirer, IOCL.

• Evaluation of risk and determination of credit limits of the Card members.

3.1. H. SERVICE PROVIDER:

It includes both Application Service Provider and Loyalty Program Manager. In IOCL, the application

service provider is AXALTO. It is a Germany based company, which has given the whole technical know-

how of Fleet Card Program and is responsible for the overall working and maintenance of the system

whereas the later is the service provider that manages the redemption aspect of loyalty program for the

Card Members with the assistance of the service provider AXALTO.

Its functions in the Fleet Card Program are enlisted below:

• Management of loyalty reward items.

• Induce and sustain the card usage.

• Provide customer helpline for card members.

• Suggest newer or improved loyalty schemes.

• Create loyalty for card members by providing attractive loyalty schemes.

• Perform complex data mining activities to analyze the impact of various schemes on card

usage.

Fleet Card Program goes through the following steps:

P a g e | 15

3.2. BUSINESS PROCESS

IOCL Fleet Card Application is a web-based system facilitating purchase of fuel/lubes through smart card

at its Retail Outlets (ROs) across the Country. The end users are Card Members and the RO dealers.

Thus, enrollment to this system can be done by the prospective customer either through internet or

through paper forms available at merchant outlets, i.e.

P a g e | 16

• Online Registration.

• Offline Enrollment(using paper forms)

≈ Manual Data entry.

≈ Entry using digital scanning of forms.

3.2. A. ONLINE REGISTRATION

Online registration is the process where the customers can apply for the membership of the fleet card

through internet. Once the online application form is filled by the interested Customers , the application

form is sent for further verification, which is done offline. The process of online registration includes

following steps:

• Once the online form is filled after visiting the web site and selecting the registration option

respectively, a registration no. is displayed on the screen.

P a g e | 17

• This registration no. is further communicated to the customer via email or else a customer can

take out a printout of it for future reference.

• For any subsequent checking of the status, “registration Status” option is provided on the web

site.

• There is a payment gateway link on the website where the customer after registration can pay

the requisite registration fee.

• Simultaneously a mail is sent to the IOCL Fleet Card Managers in HO & the State Offices with a

link to the online registration form for the enrollment of the customer.

After appropriate verification of the application form is done and once being enrolled as a card member,

the customer can easily access the website by using his/her user ID and password.

Following Flow Chart shows how online registration actually takes place:

P a g e | 18

Online Registration

CU

STO

MER

HO

ST

P a g e | 19

CUSTOMER VISITS FLEET

CARD WEBSITE

CUSTOMER FILLS UP THE ONLINE

REGISTRATION FORM

CUSTOMER SUBMITS THE

FORM

REGISTRATION NUMBER GENERATED AND SHOWN ON

SCREEN

REGISTRATION NUMBER WILL BE EMAILED TO THE CUSTOMER

PAYMENT GATEWAY LINK CAN BE USED PAY REGISTRATION

FEE

3.2. A. OFFLINE REGISTRATION

Besides online enrollment, Customer, if desires, can also go for offline enrollment by filling the

application form available at various sourcing channels like IOCL offices/ Fleet Card Credit Partners/

Merchant Outlets. Offline Enrollment involves following steps:

• The Customer is provided with an Application form having unique Form ID and Source ID by the

Fleet Card Sourcing Channel.

• Once the form is filled it is submitted back to the sourcing channel along with the enrollment fees

which is further provided to the Issuer(IOCL) for approval, which subsequently forwards it to the

data center where required data entry is made either of the given two ways:

I. Manual data entry:

• At first, the information given by the customer in the application form is entered by the

Data entry Operator in the System.

• After data entry, the system will run to verify if the customer is already enrolled in the

Fleet Card Program based on Customer name, Vehicle Registration number, Telephone

Number, City, Pin Code etc.

P a g e | 20

• If the customer is not enrolled, then the system will enroll the customer and will generate

a unique customer ID and a file containing personalization data. The Customer ID will be

the primary account of the card member.

• Personalization data file is sent to the personalization center for card personalization.

II. Form Scanning.

• Same process is followed as in case of enrollment through paper forms up to the point the

physical form reaches the Data Center.

• The Application form is then scanned through digital scanner and is uploaded to the

HOST(Central Server located at the Data Centre for receiving, storing, processing and

sending data for the Fleet Card Program).

• System will run the validation check to verify if the customer is already enrolled on the

basis of Customer Name, Vehicle Registration Number, Telephone Number,

City/Town/Village, PIN Code etc.

• The data entered is in form is checked for correctness on the basis of above information.

• If found OK, system will generate a unique Customer ID and a file contain Personalization

data. The customer ID will be the primary account of the Card Member.

• This enrollment request will be marked as “New Enrollment Offline” in the database.

• In case if the request is for duplicate or additional cards, then the original customer ID will

be retained.

• Finally the personalization data is sent for Card personalization.

P a g e | 21

OFFLINE ENROLLMENT- Manual Data Entry

CR

ED

IT

PA

RTN

ER

CU

STO

MER

Credit Card

SO

UR

CIN

G

CH

AN

NEL

DA

TA

CEN

TR

E Prepaid Card

Success

Failure

P a g e | 22

FOR CREDIT CARD THE APPLICATION FORM SENT TO CREDIT PARTNERFOR CREDIT

APPRAISAL

CUSTOMER FILLS UP THE APPLICATION FORM

& PAYS THE ENROLLMENT FEES

CUSTOMER RECEIVES THE

CARD

APPLICATION FORM SENT TO ISSUER FOR

APPROVALSOURCING CHANNEL

PROVIDES THE APPLICATION FORM TO

THE CUSTOMER

MANUAL DATA ENTRY

APPROVED APPLICATION

FORM SENT TO DATA CENTRE

MANUAL INTERVENTION

SEND PERSONALIZATION

DATA TO PERSONALIZATION

CENTRE

VERIFY DATA

CA

RD

PER

SO

NA

LIS

ZA

TIO

N

CEN

TR

E

OFFLINE ENROLLMENT- Form Scanning

CR

ED

IT

PA

RTN

ER

CU

STO

MER

Credit Card

SO

UR

CIN

G

CH

AN

NEL

P a g e | 23

CUSTOMER FILLS UP THE APPLICATION FORM

& PAYS THE ENROLLMENT FEES

APPLICATION FORM SENT TO ISSUER FOR

APPROVAL

SOURCING CHANNEL PROVIDES THE

APPLICATION FORM TO THE CUSTOMER

CUSTOMER RECEIVES THE

CARD

FOR CREDIT CARD THE APPLICATION FORM SENT TO CREDIT PARTNERFOR CREDIT

APPRAISAL

CARD DISPATCH IN A WELCOME KIT

PERSONALIZES CARD

DA

TA

CEN

TR

E Prepaid Card

Success

Failure

CA

RD

PER

SO

NA

LIS

ZA

TIO

N

CEN

TR

E

3.2. C. PERSONALIZATION

Once the customer gets himself/herself registered, card personalization is done. Personalization is the

method of loading personal data on the user card at the personalization center, which is highly secured.

It is divided into three parts:

• Key generation process: Here a set of 16 keys of 16 characters is defined which is to be

injected/embossed in the Master Card.

P a g e | 24

FORM SCANNING

CARD DISPATCH IN A WELCOME KIT

PERSONALIZES CARD

APPROVED APPLICATION

FORM SENT TO DATA CENTRE

MANUAL INTERVENTION

SEND PERSONALIZATION

DATA TO PERSONALIZATION

CENTRE

VERIFY DATA

• Key injection Process: Here the keys developed is injected from the master card to the User Card.

Due to the need of the high security only a person either appointed or authorized by the IOCL can

inject these keys.

• Card personalization: Here the user card is physically embossed or engraved and the Card

Personalization machine loads personal data. Personal data includes details like Card ID, Card

Member Name, Vehicle Registration Number and Expiry Date etc.

• The Card is set with default PIN that is generally initialized with “0000”. Finally, the user card is

sent to the Customer in a welcome kit. The Card Holder through a secured four-digit personal

identification number authorizes the transaction on the fleet Card, i.e. PIN.

FLEET CARD BEFORE AND AFTER PHYSICALLY EMBOSSED

Fleet card before card is embossed or engraved.

Fleet card after card is embossed or engraved.

P a g e | 25

Following Flow Chart will make the process of Card personalization more clear:

P a g e | 26

Card Personalization

CA

RD

PER

SO

NA

LIZ

ATIO

N

HO

ST

CEN

TR

E

3.2. D. USER PIN CHANGE

The XTRAPOWER Fleet Card is sent to the customer in a dormant condition. This is done essentially to

protect the card member against any misuse of his/her fleet card(s) before he/she actually receives

them. It is mandatory to change the default User PIN (Personal Identification Number) before the first

transaction takes place. However, subsequently the PIN (Personal Identification Number) can be

changed at any time by the Card Holder. To activate the XTRAPOWER card, the Card Holder needs to

move to the nearby-designated RO (Retail Outlet) of IOCL. The Fleet Cards are activated by changing the

default PIN on the Card Terminal at any Retail Outlet of IOCL. Thus, following steps are followed to

change the default user PIN:

P a g e | 27

SENDS DISPATCH DETAILS TO HOST

PERSONALIZATION DETAILS SENT TO CARD

PERSONALIZATION CENTRE

GENERATES WELCOME LETTERS

PERSONALIZES CARD

HOST RECEIVES DESPATCH DETAILS

DISPATCHES PACKAGE TO CUSTOMER

• At first the card has to be inserted in the POST (Point of Sales Terminal i.e. Retail Outlets of IOCL).

If the card is in dormant condition i.e. not used by the customer for more than 3 months or any

period will be defined.

• Then an online connection will be made with HOST(Central Server located at the Data Centre for

receiving, storing, processing and sending data for the Fleet Card Program) to verify the Card for

hot listing etc. Hot listing is the process where the card is marked as hot listed so that no further

transaction on that particular card will be entertained (A card can be hot listed if it is reported to

be lost, damaged or stolen).

• If card is found to be “Hot Listed”, then no further transaction will take place on that particular

card.

• If the card is validated by the POST, then the menu is displayed where the old PIN is changed for

the new one. New PIN must be different from the Old/defaulted PIN.

3.2. E. RELOAD

Once the Card is activated, the customer loads money on the card. There are two kinds of Fleet Cards,

i.e., Prepaid Card and Credit Card

PREPAID CARD: Under the Prepaid Card System, the Card Member has to first reload the card with the

required amount and then they can use the card for the purchase of Fuel/lubes from the ROs (retail

Outlets) of IOCL. Firstly, the Card Members/Card Holders pay at the designated ROs to load and reload

money value on the card. Here there are two types of customers’ viz. Generic and normal. Generic

customers include Vodafone, Bharti Airtel, Reliance India Mobile etc. Thereafter they can purchase

lubes/fuels against the card balance.

CREDIT CARD: It is a kind of co-branded card offered to the customers by IOCL with present credit

partner Sundaram Finance Ltd. The later extends credit to card members for purchase of fuel/lubes

through Fleet Card. The credit partner, Sundaram Finance Limited (SFL), has to send cheques to Finance

P a g e | 28

Department of the Head Office of IOCL, within two working days of sale of Fuel/Lubes through credit

cards. Thus in case of credit variant, based on the card limit as approved and sanctioned by the credit

partner, each of the card of the fleet owner will be given daily limit. Once the amount within the limit is

loaded in the card, customers can easily procure fuel/lubes from designated ROs of Indian oil. The daily

(Credit) limit on the card is automatically gets reset at midnight (00:00 hrs). The credit variant of the

card again provides two options to the Fleet Owners

In case of interest bearing credit, the Card Member has to pay the finance charges as decided by the

credit partner for the already used credit.

In case of interest free credit, the Card Member does not have to pay any interest for card utilization

during a specific period. The Card Members are given no reward points on the card usage under interest

free credit option whereas rewards points would be awarded under the interest bearing credit option of

the credit variant on the purchase of Fuel/lubes.

Thus for the prepaid variant of the Fleet Card , the first transaction will be reload transaction whereas for

the credit variant the transaction limit, daily limit shall come pre-initialized on to the card, hence reload

is not required. A Card Holder can use his card as long as the card has money value on it.

Once the card is activated, customer can easily control his/her fuel/lubes expenses better through the

different limits prescribed by the IOC for each of the fleet card.

• TRANSACTION LIMIT: It sets the maximum value of a sale transaction on a fleet card (default

value Rs12000). This limit ensures that each individual purchase on the card must not exceed the

prearranged limit.

P a g e | 29

• DAILY LIMIT: It sets the maximum value of a sale transaction that can be done through the

card in a day (default value Rs. 24000). This limit has been provided to evade the misuse of the

Card.

• CASH PURSE LIMIT: It sets the maximum value of a sale transaction amount that can be loaded

or can be held in the card at any point of time. (Maximum value Rs. 50000).

• MONTHLY LIMIT: Its sets the maximum limit to the Fleet card during the month. The sales

transaction cannot exceed Rs. 70,000 during a month in a single Fleet Card.

It is mandatory to specify the above-mentioned card limits in the application forms or else the

application form will be treated as incomplete. The limits on the card can however be changed

subsequently by giving a written request to the Fleet Marketing Office

Now the Reloading can take place in either of the two ways:

• Offline reload, also known as Manual Reload.

• Online Reload, also known as CCMS (Central Cash Management System) Reload.

OFFLINE/MANUAL RELOAD

To load a Prepaid Card, Card Member/Card Holder has to pay the desired amount to be loaded on the card at any designated Retail Outlet (ROs) of IndianOil and present the card for loading the money value on to the card. The money value so loaded on the fleet card shall be treated as payment in advance for future sales transaction of fuels/lubes at designated ROs. Hence following steps are followed to reload XTRAPOWER fleet card manually:

P a g e | 30

• First of all the User Fleet Card is inserted in the POST (Point of Sales Terminal i.e. Retail Outlets of

IOCL) and amount is paid to the RO by the Card Holder/Card Member.

• If the card has not been used for 3 months, it is verified with the HOST (Central Server located at

the Data Centre for receiving, storing, processing and sending data for the Fleet Card Program)

for hot listing etc. if the system responds positively, then the card is marked as “Hot listed” and

no further transaction will be allowed. (A card can be hot listed if it is reported to be lost,

damaged or stolen).

• If POST validates the Card, then the “Manual Reload” option is selected from the “Menu Option”

and the amount is loaded.

• System then prompts user PIN (Personal Identification Number). POST (Point of Sales Terminal i.e.

Retail Outlets of IOCL) will ask for SAM (Merchant/Retail Outlet) PIN. Merchant/Retail Outlet enters

the PIN in case, if wrong, then it is blocked. Nevertheless, if the PIN entered right then the user

card is uploaded with the requested amount.

• The POST prints the receipt and hands it over to customer.

P a g e | 31

MANUAL RELOAD(OFF-LINE)

CUSTOMER POST MERCHANT

P a g e | 32

NO

YES YES

NO

NO

YES

YES

YES NO

In case if the Fleet Card contains a predefined limit then in that case the cash reloading will be done

online. This is being done primarily to capture the high value transactions of the system to be online and

P a g e | 33

CASH PAID TO RO BY CARDHOLDER

HAS MAX TRANSACTION EXCEEDED?

CAN’T RELOAD ON THIS

POSTDISPLAYS “LIMIT

EXCEEDED” OPTION

TRIES ON OTHER POST

HAS MAX SETTLEMENT

TIME EXCEEDED?

INSERT USER CARD IN THE POST

DISPLAYS MENU

CUSTOMER CARD IS

REJECTED

CHOOSE RELOAD OPTION

PROMPTS FOR USER PIN

ENTERS”USER PIN”

“INCORRECT PIN” DISPLAYED

“USER PIN” CORRECT?

CARD HOT LISTED OR EXPIRED?

RELOAD AMT

ENTERED

CREDIT USER A/C & PRINT RECEIPT

FOR TRANSACTION

IF PIN ENTER 3 TIMES

WRONG,PIN IS BLOCKEDCOLLECTS

RECEIPT & CARD

faster settlement with the HOST (Central Server located at the Data Centre for receiving, storing,

processing and sending data for the Fleet Card Program i.e. Axalto, the Service Provider).

Hence the card member can also use CCMS reload facility for reloading of card. For CCMS reload, the

card member will first have to deposit a lump sum amount at a designated RO for recharge of his CCMS

account. Now the money available in the account can be used to reload the Fleet Card(s) from any

designated ROs of IOCL in the country. This payment for CCMS recharge can be made in cash (maximum

Rs 50,000/- at any point of time) at designated ROs of IndianOil.

STEPS INVOLVED IN ONLINE RELOAD THROUGH CCMS RECHARGE :

• Once the Card Holder goes to the Merchant/Retail Outlet to reload money online on his user card

from its card member’s central kitty on the HOST, POST (Point of Sales Terminal i.e. Retail Outlets

of IOCL) checks if the user card ID is in the “Hot List”. If the System responds positively, then the

card will be marked, as hot listed and no further transaction will take place. (A card can be hot

listed if it is reported to be lost, damaged or stolen).

• If the POST validates Card, “Online Reload Option” is displayed on the “Menu”, which is to be

selected.

• After then the system will prompt for the USER CARD PIN. In case of wrong entry of PIN, user can

re-enter up to 3 times, if failed, card PIN is blocked.

• In case the entry of User PIN is successful, the POST prompts for the Merchant (SAM) PIN.

• Once the Merchant enters the PIN, in case of wrong PIN (3 times), SAM PIN is blocked.

• If the PIN is valid, amount required is asked to be loaded which is decided on the basis of the

cash purse limit of the card member.

P a g e | 34

• If reload amount exceeds the cash limit, then the reload will be rejected but if it does not then

the POST goes online and sends the reload amount to the HOST.

• The HOST will check whether that much amount is there in the central kitty of the card member.

If it is available then the reload amt is debited to the CCMS a/c of the card member. The reload

amt is then loaded on to the User Card.

• During Batch Settlement, the transaction is sent to the HOST along with other Transaction.

ONLINE RELOAD(CCMS)

CUSTOMER POST MERCHANT

P a g e | 35

USER CARD PRESENTED FOR RELOAD

INSERT USER CARD IN THE POST

FAILURE

YYE

SUCCESS

YES NO

NO

NO

YES

YES

NO

In offline Reload, the Card Holder pays the requisite amount to the Merchant/Retail outlet after inserting

the card in the POST (Point of Sales Terminal i.e. Retail Outlets of IOCL). In case the card is dormant or

hot listed, no further transaction on that card will be allowed. Nevertheless, if the POST validates the

card, then the required recharge is to be done.

In online reload, the Card Members have to have an account with HDFC bank. Here the prepaid variant

of the fleet card reloads online from the balance available in the bank account of the Card Member at

HDFC Bank. Again the card also has a pre-defined cash purse limit. Thus a card can perform CCMS

P a g e | 36

REDUCE RELOAD AMT FROM CARD

MEMBER’S CENTRALKITTY

DISPLAYS MENU, ENTER USER PIN

“ERROR MESSAGE”

REFUSE RELOAD

PROMPTS FOR SAM PIN

POST CONNECTS TO HOST TO CHECK

AVAILABILITY OF AMT IN CARD MEMBER’S

KITTY

“USER PIN” CORRECT?

VERIFY CARD, CHECK EOD AT

POST

RELOAD AMT

ENTERED&CASH LIMIT CHECKED

PRINT RECEIPT

FOR RELOAD

IF PIN ENTER 3 TIMES

WRONG,PIN IS BLOCKED

RELOAD REJECTED. REMOVE CARD

POST LOADS THE AMT TO USER CARD

POST REFUSES THE RELOAD

CARD TO BE REMOVED

(Central Cash Management System) recharge/reload for any amount within the cash purse limit. Once

the card is reloaded, all further sales transaction can take place offline. CCMS recharge can also be done

through Location/Retail Outlet, for instance, if the Transport Vendor wants to transfer partial amount of

his dues to his Fleet card account.

3.2. H. SALE

Once the Card Member’s Fleet Card reloaded, Sales Transaction takes place. Sale is the process where a

merchant/Retail Outlet sells fuel/lubes to fleet cardholders. Sale transaction will not take place unless

and until the card holds sufficient amount.

Each User Fleet Card has a predefined transaction limit as well as daily limit on the card. The Card

Holder can only be able to access the card if it is within the daily limit of the card. Once a sales

transaction takes place, that amount is deducted from the daily limit. Thus, a Card Holder cannot

perform any sales transaction on the card beyond daily limit and transaction limit of the Fleet Card.

Whereas in case of credit variant of the Fleet Card, Sales Transaction details are transferred to the

Credit Partners of IOCL on a daily basis that in turn will be responsible for maintaining the credit limits.

Sales at RO are done through:

P a g e | 37

STEPS INVOLVED IN THE PROCESS OF SALES:

• At first the User Card has to be inserted in the POST (Point of Sales Terminal i.e. Retail Outlets of

IOCL).

• POST checks if it has reached the End of Day i.e. If the batch has reached the maximum number

of Transactions or settlement time has exceeded.

• If EOD has reached, POST cannot transact unless batch is settled.

• If the card has not been used for 3 months it is verified with the HOST(Central Server located at

the Data Centre for receiving, storing, processing and sending data for the Fleet Card Program)

for hot listing etc. if yes then the card is marked as “Hot listed” and no further transaction will be

allowed.

P a g e | 38

• If POST validates the Card, “Sales Option” is selected from the “Menu Option” and the Sales

amount is loaded as per.

• In case the amount loaded is more than the transaction limit, daily limit or current available

balance in the card, an error message will be displayed and the Sales Transaction is rejected.

• In case the Sales amount is within the above-mentioned limits, the POST prompts for User PIN.

• Once the Card Holder enters the PIN, then in case of wrong PIN (3 times), User PIN is blocked.

• If user PIN is valid the POST deducts the Sales Amount from the User Card.

• POST prints the receipt and hands it over to customer

• During Batch Settlement, the transaction is sent to the HOST along with other Sales Transactions.

P a g e | 39

P a g e | 40

3.2. I. VOID

P a g e | 41

CARD HOLDER

Yes No

POST

No No

Yes Yes No

YesYes

No

NoYes

Yes

Yes

No

USER PIN IS

BLOCKED

USER CARD IS REJECTED

TRIES ON ANOTHER POST

INSERTS USER CARD IN THE POST

SELECT ‘SALE’ OPTION FROM THE

MENU

CHOOSES THE PRODUCT FROM THE SUB-MENU

ENTERS THE SALES

AMOUNT

CARD HOLDER ENTERS THE PIN

COLLECTS RECEIPT AND THE USER CARD

IF WRONG PIN IS ENTERED 3 TIMES

PROMPTS FOR USER PIN

DISPLAYS MENU

POST GOES ONLINE TO CHECK IF USER CARD

IS HOTLISTED

IS USER CARD DORMAT?

HAS EOD BEEN REACHED?

DISPLAY ‘LIMIT EXCEEDED’ MESSAGE

IS CARD HOTLISTED OR

EXPIRED?

DOES USER CARD HAS THIS MUCH

AMOUNT?

DISPLAYS ‘AMOUNT UNAVAILABLE’

MESSAGE

DEBITS USER CARD BY SALE AMOUNT

IS THE PIN CORRECT?

DISPLAYS ‘INVALID PIN’ MESSAGE

PRINTS RECEIPT FOR THE

TRANSACTION

Sale

Occasions might arise where the Merchant/Retail Outlet can perform wrong transaction entry. For

instance, a transaction of 5000/- has been wrongly entered by the merchant as 15000/-. Here to

reconcile the error the merchant follows void process by which any transaction carried out on the POST

(Point of Sales Terminal i.e. Retail Outlets of IOCL) can be easily reversed. In case of such Sales

transaction, “Void Option” is to be operated where all transactions relevant to the Primary transaction

has to be reversed. For example, if any loyalty points have been awarded then that also has to be

reversed. This method can only be processed until and unless the batch settlement is not done. It is so

because once the batch is settled there is no record of Transaction left on the POST.

The process of Void is as under:

• At first the User Card is inserted in the POST which then performs all required User Card

verification.

• From the “Menu” displayed, “Void Option” is to be selected.

• POST then asks for the ROC (Receipt of Count) number of the transaction, which is to be made

void.

• After entering the ROC number, POST prompts for the transaction amount for confirmation.

• If amount matches, POST asks for the User PIN & SAM (Merchant/Retail Outlet) PIN which is then

verified.

• POST reverse the transaction on the User Card and the receipt of the same is printed by the

POST.

Even if the batch is locked at the POST due to any of the EOD (End of the Day) conditions like reaching

of maximum number of transaction or settlement time exceeded, “Void Option” can be performed. A

maximum of five such Transactions can be performed.

P a g e | 42

3.2. A. END-OF-DAY/BATCH SETTLEMENT

At the end of every day, every Retail Outlet of IOCL has to get Batch settlement of its POST (Point of

Sales Terminal i.e. Retail Outlets of IOCL) with the HOST. The EOD are the state of affairs that gets the

batch locked unless batch is settled with the HOST. Batch Settlement is the process wherein a POST

connects to the HOST, downloads the latest “Hot List” etc, and uploads its transactions to the HOST.

Under normal circumstances, the merchant/Retail Outlet can perform the Batch Settlement process at

any time. But when EOD is reached, the Batch is locked and no further transactions can be performed

except the void transactions, the merchant is forced to perform the Batch Settlement.

EOD is reached under following circumstances:

• If the maximum number of transactions that a batch can hold during the day itself has been

performed. Here the maximum number of transaction is 75.

• If the POST is not settled for a pre-defined time period called Settlement time. This time period

shall be configured for 24 hrs.

• If any batch exceeds the total allowed sales/reload allowed on each batch of Rs.2,00,000.

• If any repair or maintenance is about to take place, then it is mandatory to do the settlement

before such repair.

During Batch Settlement following activities takes place:

• Latest Hot list files are downloaded from the HOST.

• Latest de-hot list files are also downloaded from the HOST.

• Latest transaction schemes, relevant to the POST, are also downloaded.

P a g e | 43

• Finally all transactions from the POST are transferred to the HOST.

P a g e | 44

POST HOST

P a g e | 45

EOD/Batch Settlement

NO YES

NO YES

NO YES

NO YES

P a g e | 46

POST dials a number to connect

to the HOST

POST sends acknowledgement

POST sends the version of

parameter files

Hot List is not downloaded

HOST sends latest hotlist entries to POST

POST sends the latest Change Number on it

The call is routed to the HOST

The HOST is connected to

POST

HOST checks is the hot list

latest?

Is the parameter file

latest?

HOST sends latest parameter file

Parameter File is not downloaded

Is Batch pending?

POST sends acknowledgement

POST sends Batch ID

HOST opens a new batch

HOST sends no. of Transactions received

POST sends remaining txns to

the HOST

HOST sends acknowledgement &closes batch

POST sends reconciliation

request

Is Batch total correct?

HOST approves. Batch accepted

HOST sends error message

3.2. J. HOT LISTING

In case if the Card Holder/Card Member loses or gets the card damaged or stolen, then the card is “Hot

Listed” to prevent any misuse. Hot listing is the process where a card (User Card or SAM i.e.

Merchant/Retail Outlet Card) is hot listed so that no further transactions can be done on it.

Hot listing can be done in either of the two ways:

1.PERMANENT HOT LISTING

In case if the card is permanently lost or damaged then it is apt for permanent hot listing. In this case

the card is blocked permanently and CANNOT be de-hot listed/reactivated. In this kind of hot listing the

hotlist flag is set as “permanent” and all the keys on the card are blocked. Both SAM Card and the User

Card can be permanently hot listed.

2.TEMPORARY HOT LISTING/DEACTIVATION

In case if the card is misplaced or lost then it is appropriate for temporary hot listing, this is so because

there is always a possibility of getting back the card again and needs to be de-hot listed. Only User Card

can be hot listed and not the SAM (Merchant/Retail Outlet) card.

Hot listing of User Card takes place in the under mentioned way:

• Card member needs to immediately call up the Customer Helpline and request them for hot

listing the card.

P a g e | 47

• Once the call is made, the Card Member’s identity is validated based on two fields i.e. secret

questions and address or date of birth, filled up in the application form during enrollment.

• The Service Provider, Axalto, automatically will hot list the Card ID in the HOST.

• At the time of Batch Settlement, the latest hot list is downloaded from the HOST.

• Thereafter the latest de-hot list is downloaded by the POST.

• Once the download is complete, transactions all through the day are transferred from the POST

to the HOST.

POST generally keeps track of the Card hot listed during last 90 days. Whenever the Card Holder visits

the merchant to use a card that is hot listed, hot list flag will be marked on the Card. During the Batch

Settlement, POST will send this intimation to the HOST that the card has been hot listed. Subsequently

this Card ID will be detached from the hot list on other POST whenever they perform Batch Settlement.

Thus when a card holder comes and uses the card when the card is hot listed, following cases may arise:

P a g e | 48

4.2. REFERENCES

REPORTS:

• Annual Reports of the company (2006-07), (2007-08), (2008-09)

WEBSITES:

• www.iocl.com

• www.iocxtrapower.com

BUSINESS MAGAZINES & NEWSPAPER ARTICLES:

• IOCL Fleet Team i.e. Retail Sales and Finance Department

• IOCL Fleet Records and Files (accessible)

• IOCL library

• Corporate House Journal of IndianOil, Vol XLVI. No. 2, February 2009.

• The Economic times

• Business Standard

• Financial Express

P a g e | 49