John Hervey, executive director and CEO, Petroleum Convenience Alliance for Technology Standards
PCATS develops loyalty transaction information standard
The Petroleum Convenience Alliance for Technology Standards has begun work on developing a standard for the exchange of loyalty transaction information in an XML format. This work is being undertaken in response to significant interest by PCATS members and others in the industry. This standard, when completed, will provide for the exchange of transaction information, which will enable integrated transaction loyalty implementation. This includes the necessary data elements for appropriate messages, however, the standard will deal only with the data being transferred and not with what either the point-of-sale or host does with the data.
A number of retailers/merchants are presently offering a variety of loyalty programs, an outgrowth of an emerging interest in innovative ways to reward customers. Over the past two years, a number of PCATS members have expressed interest in developing a standardized format for the exchange of data related to loyalty programs, including the issuance and redemption of rewards and other applications specific to the petroleum/convenience industry. Several members have indicated they would consider the possibility of providing their formats for consideration in the standards development process. Available loyalty programs utilize both stand-alone devices and integrated POS systems to capture data and transmit it to the loyalty host for processing. Increasingly, such processes are mirroring financial transaction processing and, thus, are raising similar technological issues.
There are a number of pilot programs and extended rollout programs currently being put in place with various retailers and multiple vendors. These vendors are currently looking for a more system-architected solution to allow more rapid implementation and elimination for duplication of efforts for both the retailers and the vendors. Significantly, adoption of a data format standard will not hamper the ability of vendors to offer creative, flexible and competitive applications/programs. Retailers can more easily accept a variety of loyalty programs. Both vendors and retailers would experience improved efficiencies in implementing loyalty programs.
PCATS has identified a number of business benefits of a common loyalty message standard. The most prevalent benefit is that it would facilitate integration of POS interfaces for use by different loyalty programs, thereby affording retailers the opportunity to participate in multiple programs at the same time without experiencing increased POS costs. This effort could lower a barrier to entry for new loyalty providers and refocus competition among such companies on other factors.
A further value proposition may be involved in this project. Certification of the loyalty process would allow PCATS to develop an independent certification process for data exchange, similar to that used to certify the POS and back office system interface in PCATS-NAXML. This value proposition for PCATS Members would allow POS and loyalty providers to certify their applications against the standards one time.
This effort may require a partnership work effort with a second new-work item being developed within PCATS, to ensure that any new data format standard is recognized by an electronic payment server. Moreover, the proposed NWI standard would have to coordinate with existing PCATS-NAXML POS specifications. Finally, the message structures adopted in this NWI should be consistent with those being developed by specific Device Integration Committee working groups for use within the open site architecture.
Members of PCATS have indicated a desire to pursue this development, with an eye to implementing it, including network providers and loyalty service companies. Inasmuch as major players within the retail community are implementing various loyalty programs, this standard would have a high likelihood of providing significant benefits to all retailers and vendors in the loyalty space, including those beyond the petroleum/convenience industry.
This Working Group is being led by Pat Lewis, president of Oasis Stop 'N Go, Twin Falls, Idaho. Pat's company is a Class A member of PCATS. Pat also serves on the board of directors of NACS. He invites anyone with an interest in this work to join the group, whether a PCATS member or not. Meeting information is located at http://www.pcats.org/, just click on Calendar. Updated information on this initiative will also be on the Web site.
John Hervey is the executive director and CEO of the Petroleum Convenience Alliance for Technology Standards. If you have any questions for him or would like to further discuss this expert corner article, please contact him via (703) 836-0919 or jhervey@pcats.org.
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