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    Shell Merchants Smiling Over Reduced Service Fees

    New initiative improves credit card settlement timing.

    By W.B. King

    HOUSTON -- In recent years, rising credit interchange fees, along with the cost of ever-increasing gasoline prices have retailers and wholesalers seeing red. To help combat this prevailing issue, Shell announced two changes designed to improve the operating costs of card acceptance to its channel partners.

    "Shell, as well as its competitors, has temporarily lowered merchant service fees for branded operators in the past to provide relief from rising gasoline prices, which increases the cost of doing business for retailers and wholesalers," Karyn Leonardi-Cattolica, of external affairs and issues management for Shell Downstream US, told CSNews Online. "However, the changes announced today are not temporary."

    Effective April 28, Shell will introduce an enduring reduction to merchant service fees for MasterCard, American Express and Voyager (fleet card).

    Additionally, a new credit card settlement process will roll out with the intention of improving wholesaler and retailer cash flows by speeding up the timing of deposits into operators' financial accounts.

    Current Fee Structure/ New Fee Structure:

    MasterCard

    -- 2 percent +10 cents per transaction (cpt)/ 1.65 percent + 13 cpt

    American Express

    -- 2.8 percent + 15 cpt/ 2.45 percent + 15 cpt

    Voyager

    -- 2.95 percent + 30 cpt/ 2.35 percent + 30 cpt

    A direct retail location, for example, with a volume of 1.8 million gallons of gasoline per year would realize an estimated annual savings of approximately $3,100, while a wholesale operation with 20 million gallons a year would realize approximately $34,100.

    When asked why Visa was not a participating, Leonardi-Cattolica responded, "Visa is considered proprietary, but I can tell you that many Shell-branded retailers and wholesalers have been enthusiastic about our previous announcements about temporary merchant service fees."

    Leonardi-Cattolica explained that credit card settlement transactions will be expedited ultimately improving cash flow. "We just announced this non-temporary change so it's too soon to have gathered any specific responses [from retailers], but we do anticipate this one also would be well received."

    In other Shell news, a student-built prototype vehicle broke the mileage record at this year's annual 2008 Shell Eco-Marathon Americas.

    While more than 300 students comprising 32 teams from Canada, Mexico and the United States entered the competition, it was the students of Mater Dei High School of Evansville, Ind., that set the new mileage record and won the $10,000 grand prize. Each school was challenged to design, build and test fuel-efficient prototype vehicles that travel the farthest distance using the least amount of fuel.

    The winning team's combustion-engine prototype vehicle achieved a remarkable 2,843.4 miles per gallon. Despite wind gusts of up to 50 miles per hour and various teams' mechanical issues, the competition was steep this year with three teams breaking the 2007 mileage record set by Cal Poly, San Luis Obispo.

    "When we first arrived, I wasn't sure a small high school like Mater Dei could compete with all these elite colleges," Justin Stute, Mater Dei High School team captain said in a released statement. "But our first run broke the record and then our second car did even better. That really motivated both of our teams to go all the way."

    Mark Singer, global project manager for the Shell Eco-marathon said in a released statement. "Students participating in this competition are the brains of the future, stretching the boundaries of fuel efficiency and providing solutions to the global energy challenge. Throughout the two-day competition, teams are constantly making improvements to their vehicles, exchanging ideas and inspiring one another to pay attention to their own energy footprint."

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