Have you heard of the new payment service that makes refueling a breeze? As the number of petrol stations shrinks each year, lines and waiting times are continuously increasing. To combat this inconvenient trend, CarPay-Diem lets users authorize fueling transactions and pay automatically via smartphones or connected vehicles.
by: Silicon Luxembourg
photo: Anna Katina
featured: Frédéric Stiernon
Save time, pay instantly & find deals with CarPay-Diem
When the vehicle stops at the service station, the smartphone or the car’s connected dashboard screen lights up automatically. The driver indicates the pump number and is invited to refuel. Once the nozzle is put back in place, a transaction receipt is sent immediately.
CarPay-Diem, which also handles payments and loyalty points, lets petrol stations send targeted promotions to visitors, encouraging them to enter the shop and take advantage of the offer before leaving.
CarPay-Diem’s ambition? To create a world where all drivers and all service stations are connected.
Silicon Luxembourg sat down with Frédéric Stiernon, to find out more about where this fast-growing startup came from and where it is headed.
“At service stations today, we are refueling just as our parents did with their first cars. I also found that, despite what they say, petrol stations do not know their customers.”
How did you come up with the idea?
In November 2015, the mobile-payment company where I worked, FLASHiZ, was closed by its owners, Irish group Fexco, forcing me to make a tough decision about my professional future.
I could either apply for a new position or create a new company. Having familiarized myself with various ecosystems during the deployment of FLASHiZ – including catering, parking, fuel and hypermarkets – I realized that the fuel industry had not evolved in 30 years. The last significant development was the arrival of external payment terminals in the mid-1980s. At service stations today, we are refueling just as our parents did with their first cars.
I also found that, despite what they say, petrol stations do not know their customers. If you refuel and pay at outdoor terminals, they have no way of knowing who you are and cannot propose promotions if you do not enter the shop. If you do pay at the register, cashiers offer everyone the same “promotional chocolates,” because to them we are all the same.
On one hand there are drivers who want to refuel faster and on the other hand there are stations that want to increase sales.
Modern technology was needed to change the user experience and bring value to drivers and service stations. From November 2015 to May 2016, I met with about 40 companies from this ecosystem: oil companies, leasing companies, pump operators, drivers, app publishers focused on mobility, fuel-card managers and station-equipment suppliers.
“After defining the business model, I raised €500,000 in August 2016. A portion came from friends, family and business angels, while the remaining amount came from industry partners.”
My goal was to understand the ecosystem and its concerns in order to propose a complete solution that fulfills its needs without competing with established providers.
It took me seven months to define the CarPay-Diem solution and its market positioning. During this period, I was supported by nyuko, namely by Nicolas Valaize, who challenged me on my go-to-market approach, financial situation and strategy. To be successful it is important to test ideas with objective people who are outside of the project.
I gained invaluable experience with FLASHiZ. Even though it is over now, we achieved great things during that time, but also made mistakes, which I avoided repeating with CarPay-Diem. This is why, for example, I chose to create a service rather than a mobile application.
After defining the business model, I raised €500,000 in August 2016. A portion came from friends, family and business angels, while the remaining amount came from industry partners.
Three companies decided to support CarPay-Diem with technical developments: Nowina Solutions, SimplyCIT and Mobile Inception. Thanks to their contributions, our platform was up and running within a few months, and the first stations are already connected.
This approach allowed CarPay-Diem to move forward quickly without burning cash or committing resources to developing the platform. I want to take this opportunity to recognize these three companies and the other investors who have trusted me and who are still actively involved in our evolution.
Who are your customers?
Due to our positioning outside of the existing ecosystem, we have several types of customers.
The first are, of course, petrol stations. By connecting to CarPay-Diem, any station can offer drivers a unique user experience without changing its current operations or making a financial investment. They can efficiently communicate with a large number of drivers and propose targeted offers tailored to each of their profiles, boosting sales as a result.
Our second customer base consists of app developers. If an average European driver refuels three times a month, applications that integrate CarPay-Diem benefit from recurring usage, regular visibility and new business opportunities. In addition, CarPay-Diem provides developers with service-station data that allows them to publish fuel prices or list each station’s services and opening hours. All of this adds value to their apps.
“CarPay-Diem is already compatible with over 65,000 service stations, some of which are more than 25 years old.”
Thirdly, we serve car manufacturers that integrate CarPay-Diem into the dashboard of their connected vehicles, letting cars make payments directly – no smartphones necessary.
Lastly, we work with companies specialized in turning normal vehicles into connected vehicles by embedding new technology, which lets owners of older cars benefit from the CarPay-Diem experience.
Who are your partners?
In addition to the clients and partners listed above, we work closely with suppliers of petrol-station equipment. Because of these partnerships, CarPay-Diem is already compatible with over 65,000 service stations, some of which are more than 25 years old.
We are also in contact with several companies that install recharging stations for electric vehicles. The nature of our solution allows us to serve both standard, fuel-dependent vehicles and electric vehicles.
What is your business model?
It is very simple: We collect a tiny commission from petrol stations for each refuel transaction by a CarPay-Diem user. If there is no customer, there is no commission and therefore no financial commitment required by the station.
Station data and driver loyalty programs provide additional revenue streams.
“GLOB has decided to integrate CarPay-Diem because it is a service that its customer base has come to expect. This means that 3.5 million GLOB users can benefit from our service.”
You were selected by Valeo. What did you gain from that?
Valeo is a world leader in automotive OEMs. This selection was the catalyst for our participation in the Vivatech 2017 fair in Paris – a game changer for us. In the fuel industry, we are now recognized as a company worth following. Valeo definitely put us on the map and we are extremely grateful to them. Our number of commercial contacts has increased considerably since Vivatech and serious growth is underway.
In addition, this increased visibility has helped spur investor interest during our second fundraising round.
You just signed a partnership with GLOB. What are the details of your collaboration?
We are very proud of our partnership with GLOB, a mobile application that offers services to make life easier for drivers. After interviewing several app users, GLOB has decided to integrate CarPay-Diem in the coming weeks because it is a service that its customer base has come to expect. This means that 3.5 million GLOB users can benefit from our service come fall 2017.
“We are working with a car manufacturer that wants to integrate our technology directly into its connected vehicles.”
What are your short-term plans?
At the moment, we have to admit that things are going faster than originally planned. The deployment of CarPay-Diem recently began in Belgium, where our technical partner has 1,200 service stations – 38 percent of the Belgian market. We will have 150 stations equipped before the end of the year. Deployment in England will launch in Q3 2017 in collaboration with a company that services more than 2,500 stations in the country and several popular mobile apps.
We are also moving forward in France and Luxembourg, with plans to equip service stations in both countries before the end of the year.
Last but not least, we are working with a car manufacturer that wants to integrate our technology directly into its connected vehicles.
Tell us more about your team.
I am lucky to have been joined by three extraordinary and highly experienced individuals. With 27 years spent in the world of petrol stations, Remko is our expert in the field. He has mastered the technical aspects and the specificities of this environment.
“Our team currently has more than a century of professional experience, making CarPay-Diem a rather unique startup.”
Alain manages our operations and finances. Over the past 20 years, he has held various management positions in international companies and knows how to control costs during times of rapid growth.
Kevin oversees technology, or rather technologies. He coordinates our partners’ developments in the areas of security, payments and, often outdated, communication protocols, ensuring that the entire system runs smoothly.
Our team currently has more than a century of professional experience, making CarPay-Diem a rather unique startup.
Facts & Figures
- 12 European countries
- 85,000 active gas stations
- 5 billion refuels per year
- 40,000 refuels via CarPay-Diem in 2017 & 800,000 in 2018
- Presence in 12 countries within the next 5 years
- First round of fundraising completed in August 2016: €500,000
- Second round in progress with target of €1.5 million