Adding QuikTrip, Tempo Payments Pumps Up Its Issuing Ranks

Tempo Payments Inc., the PIN-debit alternative network for retailers, has signed another large gas-station/convenience-store chain to its issuing ranks. Tulsa, Okla.-based QuikTrip Corp. will offer a rewards card program in a phased rollout beginning in the second quarter involving 50 stores in an unspecified market, Tempo announced this week. Privately held QuikTrip, with 473 stores in nine states and an estimated $7.16 billion in revenues in 2005, is Tempo Payments' largest announced issuer to date. Forbes magazine ranks QuikTrip No. 28 on its list of the largest private companies. A QuikTrip spokesperson tells Digital Transactions News that the top reason his company joined Tempo Payments was to find an alternative to bank cards. “We're like everybody else, we're trying to combat the high fees on credit cards,” he says. “Hopefully, this is the beginning of a solution.” QuikTrip will use part of its interchange revenue from Tempo transactions to fund the rewards program on its Tempo network debit card. New cardholders will get 5 cents per gallon off of their QuikTrip gas purchases for their first 90 days, followed by 2 cents off thereafter. San Mateo, Calif.-based Tempo Payments, which last year changed its name from Debitman Card Inc., has signed several petroleum retailers as issuers and acceptors in the past year, a period that has seen gas prices spike to over $3 a gallon, fall sharply, and recently begin to rise again. Consumers have responded by paying for gas less with cash and more with cards, cutting into sellers' margins as interchange takes a relatively higher share of revenues. “They were getting hit at every angle,” says Anthony Ruebner, Tempo's vice president of business development and relationship management. “This is top of mind for them.” Ruebner isn't impressed with MasterCard Worldwide's new 2007 interchange rate schedule, which will cap interchange on gas purchases at 95 cents (Digital Transactions News, Feb. 28). “Even with these tweaks they're making, it's still too high,” he says. Tempo merchants pay up to 20 cents in acceptance costs on gas transactions and up to 15 cents on other purchases, depending on volume. Tempo issuers receive 6 cents in interchange when their cardholders make purchases at Tempo's approximately 200,000 acceptance locations. Tempo acceptors include Wal-Mart Stores Inc., pharmacy chain CVS Corp., and bookseller Barnes & Noble Inc. The company has recently worked to beef up its roster of issuing merchants. Ruebner says Tempo has even bigger national retailers than QuikTrip waiting in the wings as issuers, but he won't give details. “Stay tuned, very soon you'll be seeing more announcements coming from us,” he says. In addition to its new debit card, QuikTrip also offers credit and fleet cards, including a consumer private-label credit card issued by Kansas City, Mo.-based UMB Financial Corp.