Interview with Gabriele Benedetto, CEO Telepass
Mr Benedetto, Telepass is undergoing a process of rapid change. Where did you begin?
Telepass is the Atlantia Group company that provides mobility services. Established in 1990, the year in which Italy hosted the Football World Cup, Telepass is now the leading operator of automated tolling systems in Europe, with a presence in Italy, France, Spain, Portugal, Poland, Austria, Belgium, Germany and Scandinavia. The figures show that we are a major Italian company that year after year has earned the loyalty of its commercial partners and customers: 1.3 billion transactions handled, over 12 million payment instruments in issue, 6.4 million customers.
Starting from tolling systems, we have over time increased the range of services we provide, putting Telepass in a unique position in Europe, with a business model based on the convergence of three different industries: mobility, payments and insurance.
Your operating environment is rapidly changing. What trends are having the biggest impact on your business?
We are exposed to innovations in the three industries I mentioned above: Mobility as a Service, Fintech and Insurtech.
These three disruptions share a number of aspects that we have had to take into account.
Firstly: disintermediation, which is removing intermediaries from the supply chain. There is no longer room for more than one middleman between the provider of a service (whatever that may be) and the end user. This is true of all sectors: Booking.com in the travel industry or Amazon for online shopping; Paypal or Satispay in the payments sector; the advent of insurance for digital natives or buyers such as Facile.it.
Secondly: the digitalisation of processes has radically altered the value chain. It is now easier to connect suppliers and customers using a standardised system thanks to access programming interfaces (APIs). The resulting standardisation enables “massification” of the services provided, which can be rolled out on a global scale. This has resulted in platforms that have increasingly begun to earn revenue from service providers as opposed to customers. Examples of this are UBER, which earns 20% from drivers, or Booking.com that receives 15% from the hotels that use its platform.
Thirdly: the democratisation of access to services. Each type of customer seeks a way of meeting their needs, finding ad hoc solutions. Age, nationality, gender and residence are no longer valid criteria for segmenting a market. Customer behaviours and data analytics are now what count.
In our sector, this means that customers want access to “pay-per-use”, “always-on” and “seamless” services: paying for a taxi or a car-share based on proximity, or boarding a train regardless of who is operating the service without having to have hundreds of apps, accounts or different credit cards.
In the end, those who can build customer loyalty will be the winners, as we can already see.
It isn’t easy to gain customers’ loyalty. How have you dealt with this challenge over time?
By developing new and reliable services, putting people’s needs at the centre of what we do.
However, loyalty is built on our history and our reputation gained by:
- ensuring a correct approach to managing customer accounts. Transparent, precise and accurate billing has enabled us to build trust over time, with customers accepting payment by direct debit;
- offering continually evolving cutting-edge services, providing an excellent customer experience. The idea that a company can launch a service and continue to supply that same service throughout its lifetime is no longer valid. Customers now expect much more from a business;
- providing value for money. Customers must view the price charged as marginal compared with the benefits gained. It is a little bit like Netflix. You pay the fee and you can then watch as much or as little content as you like, but your willingness to keep your subscription is stronger than your wish to terminate the contract.
And your competitors?
In our view, Telepass is not at risk from the big tech companies, thanks to synergies resulting from the convergence between our three areas of business. Whilst big tech is able to manage developments in the payments or insurance sectors from Cupertino or Menlo Park, the same cannot be said for mobility. Transport services are local by definition, and the way they are provided and the related rules change from country to country … indeed, from city to city. Each smart city has its own priorities.
Our defence is based on a deep-rooted presence in the market we serve and years spent building close relationships with our partners, enabling us to create services designed to meet specific needs and requirements. In brief, we are well aware of the fact that it is not possible to standardise mobility and this is an advantage for us.
Competition will come with the arrival of connected vehicles, with motor manufacturers looking to enter into specific partnerships with us in the next 10 years. In fact, this is already happening.
Having a large number of customers and offering a wide range of services gives you access to a large volume of data. How do you use the data in this ecosystem?
This data enables us to engage with customers: Telepass uses the data generated by its platform to interpret and meet customer needs. On the one hand, this enables us to improve the quality of the services we provide, increasing the perceived value of our offering, and, on the other, to achieve a high conversion rate in terms of sales. Everyone benefits, both customers and service providers.
So, what impact does technological innovation have in this scenario?
We are technologically agnostic. Telepass is a mobility service provider. Technology helps to find solutions that make our payment services more attractive than cash or credit cards.
The technology that we are most interested in and are testing at the moment is IoT. As cars are increasingly used as sensors and for providing innovative services, their ability to generate data will grow. All you have to do is consider that 500,000 signals arrive on our platform every second.
For this reason, we are updating the experience of the first connected car users. Imagine a world in which your car pays for parking without you having to lift a finger or automatically arranges a car-wash. For us, this is already a reality and will soon be presented to the market as “Telepass Next”.