The International ForecourtStandards Forum (“IFSF”)

Simon Stocks

Chairman, IFSF Ltd.

May 2015

TM

Contents

• What is IFSF?

• Our participants’ market and operations

• The equipment used

• The importance of standards

• What we have achieved

• Future opportunities

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What is IFSF?

• IFSF is a forum of international petroleum retailers, suppliers and others with the common mission to promote interoperability by developing technical standards that enable cost effective operations in retail petroleum and other sectors internationally (www.ifsf.org)

• Formed in early ‘90’s and owned by 7 major international oil companies

• Over 150 other participants – predominantly from the supplier community, although these are diverse, including:– Equipment suppliers

– Card associations

– Service providers

• Relationships with other organisations – e.g. European Parking Association, Conexxus

• Not for profit company with no staff – run by contracted service providers

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Our participants’ market

• General trend in Europe is to reduce the number of sites in each country, although pace varies

– UK: 1970 – 37,500 sites, 1991 – 21,000, 2014 – 8,600– Other countries affected by local forces and can be very different - e.g. France

similar to UK but much slower reduction in Italy– Biggest changes in countries affected by penetration of Hypers – e.g. UK Hyper

market share 1997 19%, 2015 46.5%– Has meant that rural areas have far fewer sites than before

• Margins on fuel are extremely thin– Frequently negative– Price includes a very high percentage of taxes in most countries

• Importance of C-store offering has grown– Driven by need to supplement poor fuels income with much more attractive

margins– Growing consumer trend to smaller basket/more frequent shopping has

presented the opportunity

• Although major brands are still prevalent, trend has been to transfer ownership to smaller operators with consolidation then following

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Our participants’ operations

• In addition to being a Retail operation service stations have a process control activity– Need to manage the receipt, storage and delivery of a highly

flammable product – safety and environmental concerns

– Have to meet weights & measures , fiscal and safety legislation that varies from country to country

– Potential dangers of vehicles moving on site and pedestrians crossing forecourt

• Very high footfall and low average spend– High proportion of card sales – need to meet PCI requirements

– Many of these using sector specific cards (Private Label)

• Outdoor payment common in many countries with need to ensure funds available/settled– High cost of investment and specialised software/certification

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The equipment used

• Point of Sale (POS) has become the hub of the site operation– All major equipment and functions are typically controlled from the

POS or interfaced to it

– Interface between the sales associate and the site as well as serving the customer and taking payment

– Critical functionality often in linked devices or may be in embedded services – FDC, EPS, ATG

• As a result of the operating conditions the equipment is very specialised and tends to be expensive– POS suppliers have often been suppliers of other site equipment

– Low penetration of generic Retail POS, although cloud may change this

– Site operators looking to extend life of equipment and minimise operating costs

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The importance of standards

• Before the introduction of standards it was typical that a retailer could only use the POS supported by their pump supplier with the functionality offered by that supplier

– Changes were slow to introduce– Best in market solutions were hard to adopt– Pricing was not very competitive– Other equipment (e.g. price pole and ACW) usually not interfaced

• Standards for interconnectivity have enabled much wider choice and selection of best in market products from competing suppliers

– Suppliers compete on functionality, quality and support– Pricing is much more competitive– All major equipment can now be interfaced

• Payment standards have enabled the industry to keep up with changes in the banking market – most recently mobile payment – and to achieve competition in acquiring market

– Standards continually evolving to provide best practice solutions and meet continually changing regulatory and other requirements (e.g. PCI)

– Being adopted in other sectors (e.g. EPA)

• Enable Retailers to concentrate on best solution for their customers

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What we have achieved

• Through the 1990’s the initial focus was on the basic devices and how to integrate them

– Started with the pumps (dispensers)– Other devices added as the priorities were agreed and now cover most of the

important parts of the operation

• Around the end of the 1990’s there was recognition that the big opportunity was to address card handling driven by:

– The complexity of handling multiple scheme/national requirements– The use of private label solutions and their security/product control requirements– The interest of a number of the major oil companies in pan-European acquiring

and in minimising the number of POS suppliers– Meeting the needs of loyalty schemes in the most efficient way

• Since then the focus has mainly been on cards related issues, although now revisiting device integration, updating the specs and looking to achieve common solutions with Conexxus to reach global standards

• C-store management functionality has not been a priority for IFSF– Local back-office solutions frequently used– Some majors have implemented ERP based solutions using interface definitions

provided by others (e.g. NACS)– Electronic replenishment has also been used in the industry

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What we have achieved - overview

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Key: Device Integration Standard Payment Standard Standards applicable to both areas

Note: Equipment marked * may be located on- or off-site. Other system architectures are also possible.

IFSF Standards

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Reference Standard Reference Standard

Part 2-01 Communications over Lonworks Part 3-12 Network Configuration Manager Application

Part 2-02 Communications over TCP/IP Part 3-13 Human Interface Device

Part 3-01 Dispenser Application Part 3-14 Environmental Monitoring Sensor Application

Part 3-02 Price Pole Application Part 3-15 Line Leak Detector Application

Part 3-03 Tank Level Gauge Application Part 3-16 Customer Operated Payment Terminal (COPT) Application

Part 3-04 Car Wash Part 3-16 Customer Operated Payment Terminal (COPT) Guidelines

Part 3-04 Car Wash Overview Part 3-17 Code Generating Device Application

Part 3-05 Card Handling Devices Change Request Proc. Part 3-18 IFSF POS to FEP Interface

Part 3-05 Card Handling Devices Specification Release Part 3-19 IFSF POS to EPS Implementation Guidelines

Part 3-05 Card Handling Devices Summary Part 3-19 IFSF POS to EPS Interface Schema

Part 3-05 Pin Pad Application Part 3-19 IFSF POS to EPS Interface Specification

Part 3-05.1 Pin Pad Additions for EMV Fuel Cards Part 3-20 IFSF Host to Host Interface

Part 3-06 Magnetic Card Reader Application Part 3-21 Security Specifications

Part 3-07 Bank Note Acceptor Application Part 3-24 Code Entry Device Application

Part 3-08 Printer Application Part 3-25 Controller Device

Part 3-09 Public Network Server Application Part 3-26 Vapour Recovery Monitoring System Application

Part 3-10 Card Handling Server Application Part 3-27 FDC POS Standard Interface

Part 3-10 Card Handling Server Application Description Part 3-27 FDC POS Standard Interface Schemas

Part 3-11 Delivery Control Application Part 3-28 Standard for Issuing EMV based Fuel Cards

Part 3-29 Key Management

Key: Device Integration Standards

Payment / EFT Standards

Standards applicable to both areas

Future opportunities

• Existing standards will continue to evolve• Future opportunities that will interest IFSF will be those where there

is a common industry need to meet a challenge:– Often driven by new market opportunities (e.g. Mobile payment)– Also regulatory and other requirements will need to be addressed (e.g.

Tokenisation)– Opportunities created by the Internet of Things, including the digitally

enabled motor vehicle

• Where other industries or other standards bodies have developed effective solutions IFSF does not wish to compete:– Want to ensure these meet our Retailers’ needs– Seek opportunities to make these international/global rather than national– C-store market is an example where there may be future opportunities and

others have greater knowledge/experience

• Look to expand participation to include new entrants and non-traditional players in the sector and to work with them to meet their business needs

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