Relay Payments, its recent deal with Love’s Travel Stops in place, said its payment system now covers about 75% of all diesel sales in the U.S.

That’s extensive coverage for a payments company – a field that is as competitive as any in trucking – that only began operations in 2019 and at first was only used for making warehouse payments.

In announcing its integration with Love’s, Relay Payments said its customers would be able to use Relay for “secure, over-the-road payments, including fuel, scales and cash advances” when they buy certain merchandise or services at Love’s.

Processing of fuel payments at Relay Payments is up 300% year over year, CEO Ryan Droege said. While a figure like that would obviously be influenced by changes in the price of diesel, movement in the cost of diesel has been downward in the past year.

The average retail price reported by the Department of Energy/Energy Information Administration was reported Monday at $3.539 a gallon. A year ago, it was $4.633. So the 300% growth occurred despite a serious headwind.

In the prepared statement announcing the Love’s transaction, Relay Payments listed some of the key diesel retailers that accept the company’s payment system: Pilot (NYSE: BRK-A), Maverik, Yesway, Ambest and Onvo.

Not on that list: TravelCenters of America (NYSE: BP) – one of the “big three” in truck stops along with Pilot and Love’s. In an interview with FreightWaves in conjunction with the announcement of its deal with Love’s, Droege confirmed TA does not accept Relay Payments at present.

Carriers specifically cited in the prepared statement as using Relay Payments were Schneider (NYSE: SNDR), Coyote Logistics (NYSE: RXO), and Old Dominion Freight Lines (NASDAQ: ODFL).

TPV metric is touted

Droege declined to say whether Relay Payments is EBITDA-positive. Earnings before interest, taxes, depreciation and amortization is the financial benchmark that most startups, after a few years, look to in describing their profitability or lack thereof.

Instead, he pivoted to total payment volume (TPV) as the metric that Relay Payments likes to cite, and one which he was willing to discuss publicly.

Droege said Relay’s most recent public disclosure revealed an approximate annual TPV of $1 billion. He said that figure is now up to $2 billion.

Droege said Relay Payments has about 400,000 truck drivers using its payment system, representing about 100,00 fleets. While many of the individual truck drivers have multiple payment systems available to them in some sort of digital wallet or in the form of a fleet card, Droege said many of the fleets using Relay Payments will use only that system for the efficiencies created by being on one platform.

“And a lot of them were requesting Love’s,” Droege said. “They said, ‘We’d love to be able to use Relay to buy our diesel fuel, to buy our oils and additives, everything in the store.’ So we were able to bring our existing network from the last five years and work it out with Love’s.”

The pitch, Droege added, was “these folks would like a secure electronic payment method, and they’d like to use it at your stores.”

One of the pitches: fraud-free

In one of the first sentences in Relay Payments’ statement about Love’s, it uses the term “fraud free” to describe its payment system, which is fully based on using a phone app rather than a credit card.

That eliminates the chance of “card skimming.” Droege described how skimming is accomplished.

“Somebody puts a little plastic layer over where you swipe your card, and it looks exactly the same as the fuel pump,” Droege said. “It’s very hard to tell that there’s something there.”

When the scammers have that information, Droege said, they will “clone” it to another card “and they’ll go buy diesel fuel kind of as fast as they can until somebody catches it.”

Even if a company makes good on the losses, the driver’s card gets cut off and he or she is stuck on the road without a way of paying for fuel or other necessities. A new card might need to be transported many miles by a colleague, according to Droege.

No card needed

Relay’s system has no card, Droege reiterated, and some of its users can be up and running the same day they download the app. He added that Relay Payments stands behind a “no fraud” guarantee.

Droege said there are “more people who are starting to move in that direction” – toward a phone-based system in place of cards. “We were fortunate enough to kind of pioneer the space and lead the way.”

Relay Payments began its operations servicing warehouse payments. But it has expanded since, not only into fuel but also into lumper payments, which had been a business with a heavy orientation toward cash payments.

A capital raise in 2021 provided the funds to bring the company’s system into the world of lumper payments. Before digital payments, Droege said, the noncash alternative for lumper payments had been paper checks, but that took about 40 minutes per transaction. That delay was an incentive to go with cash but brings its own inefficiencies and opportunities for fraud.

With the growth in digital payments for lumpers, Droege said, “we’ve seen most of them switch away from cash.” He added that the top 10 lumper companies in the U.S. all accept Relay Payments.

Since the 2021 capital raise, Relay Payments has not taken on additional funding. “We’ve been able to continue to deploy that capital efficiency and rely on revenue from our customers and their growth,” he said.

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