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Executives

Steve Elder – Senior Vice President, Chief Financial Officer

Analysts

Roman Leal – Goldman Sachs & Co.

Wright Express Corporation (WXS) Goldman Sachs & Co. Technology & Internet Conference 2013 Call February 12, 2013 7:40 PM ET

Roman Leal – Goldman Sachs & Co.

So why don’t we just go ahead and get started. So first of all, maybe for those who are new to the story, Steve will provide an overview of WXS, focusing on the core products and services maybe geographic, footprint and competitive advantage.

Steven Elder

Sure, we operate in two basic segments, first, the Fleet Payment segment which is where the business really grew up, started on 30 years ago and we also have another payment segment we call it which is primarily a Virtual Card product. From the fleet side of the business, it’s about 75% of our total revenues, what we offer is a payment mechanism for fleets of vehicles to give their employees access to the field that they need to go onto their delivery routes to get to their jobs sites whatever it is, but also give the company a lot of control at the point of sale so that they know that their employees are getting fueled they need, but not other things. So simple examples like our product can lock it down, so that the employee can only buy fuels, not stuff inside the gas station store, cokes and smokes we call it.

We can lock it down, so that you can only buy there certain times of day or days or the weeks, we can report on the fact that somebody bought out of the geographic area, if you want to set up that way or bought premium unleaded gasoline which is kind of against policy, so a lot of control at the point of sale, as well as some backend reporting. It’s all designed around eliminating misuse of the card or unauthorized purchases and when somebody adopts the product for the first time, they will save between 5% and 15% on their fuel purchases.

The other payment segment is really what we call a Virtual Card product it’s the major part of that segment, and the major application of that is with the online travel agencies or companies like Expedia and Priceline use our product as the backend of their hotel programs, so when those online travel companies make a hotel reservation on your behalf and eventually have to make a payment to that hotel, it’s our MasterCard based product that is making that payment for them.

And what we’ve developed is a great interface into their frontend, so it integrate seamlessly with their systems, but also a reconciliation process on the backend, so that they know that if the charge comes through for the right amount, for the right hotel, for the right date, for a right person that nobody has to look at it and the payment is going to go through seamlessly from their behalf, and if it’s not one of those something does kick out as an exception than somebody can look at that specific transaction, a huge amount of back-office efficiency that it creates and it’s a very fast growing part of our business.

Roman Leal – Goldman Sachs & Co.

Great, great, thanks for the overview. Maybe starting with the fuel side of the business and it appears if that perhaps it is more exposed to the economic cycles, transaction growth have been fairly modest although picking up a little bit, what type of transaction activity are you embedding in your 2013 guidance as far as just organic growth and we’ll talk about Fleet One separately?

Steven Elder

Sure, organically, I mean you’re talking in the U.S., we’ve got in the range of 14%, 15% market share with about 6 million vehicles, it’s a slower growing part of the business compared to the other payment side of the business, but that said, it’s still mid single digits that’s pretty much what we’re embedded in our guidance for this year, as you mentioned it is somewhat economically sensitive, but I wouldn’t say it’s hugely economically sensitive, but when the economy is doing well, our customers tend to have more activity, they have another job site to go to that electrician has three more jobs, so he hires another crew.

So you do get some more volume that way. What we report out is what we call same store sales obviously, we don’t have stores, but we look at how many galloons of fuel our customers buy let’s say in the fourth quarter this year versus the fourth quarter last year and we’ll adjust for any difference in business days.

For the last, the better part of last two years or so that’s been kind of a negative 1%. Some of that is impacted by the economy, but also there is probably a little bit of fuel efficiency in there as well, either in terms of the engines, the actual vehicles that they are using or just being more efficient in the routes they’re running, more GPS technology so they don’t get lost, so things like that.

Roman Leal – Goldman Sachs & Co.

Sure. And when you layer on the Fleet One acquisition that’s going to contribute nicely in 2013, help us understand the type of growth profile that company brings and where do you expect to take it from here?

Steven Elder

The Fleet One is an acquisition that we completed back in October, the 4 of October was the date we completed the acquisition, it’s an over-the-road product, a much different product than the local fleet customers, so the local business that we have, our product is accepted at more than 90% of all our locations in the U.S. and it’s designed for the driver to get in, buy their fuel and get out and get back to their routes, their jobs like whatever it is.

The over-the-road product is a much different product and it’s designed around the driver and it’s designed around controlling, what is individually one of the biggest expenses of that company, this is a business whose job is to run big trucks and fuel is a big part of that expense. So it’s much more controlled it is designed so that, you go in, you go to the certain truck stop, you go between these hours of the day and they will activate the card for just those hours you are instructed to buy a 150 galloon of diesel fuel, when you burn through that the next day, you’ll be instructed where to stop the next day and it’s a much more controlled transaction

Fleet One is probably in the kind of 15%, 10% to 15% market share of the over- the-road marketplace. There are much faster growing part than our core business, they were, over the last couple of years before we bought them in the range of 20% revenue growth, some of that is due to fuel prices, but even when you strip that out still kind of a double-digit growth number, mainly targeted at smaller businesses, those three or four trucks as opposed to the, maybe the big national names or something like that, but flying little bit under the radar, compared to the some of the others in the space, but growing very, very nicely.

Roman Leal – Goldman Sachs & Co.

Maybe if you can just oppose the competitive environment and the – kind of the core local fleet business and now the OTR business. Do you feel like you’re well positioned or you better position one versus the other are you big enough now in the U.S. or do you still feel like you need to maybe acquire another asset?

Steven Elder

When you look at it now, there is essentially kind of five players, five fuel card providers, there is – there is us and, a couple others that are just focused on heavy trucks and a couple others that are more focused on the local marketplace, you put them all together that’s really the marketplace and you get all the oil companies have their own kind of programs as well, but for the most part they are outsourcing either to us or one of our competitors. So, for the most part there is really kind of five products, five companies.

That said, we’re really the only ones that in the entire marketplace that will cover all aspects of the market. So, we will cover automobile fleets, we’ll cover vans and trucks, we’ll cover heavy trucks, we’ll cover small sized fleets, we’ll cover very large fleets, we’ll cover government fleets, there is nobody else really that has that entire package.

So, we think we are very well positioned to against anybody in the marketplace. Our products will stack up against anybody and we’ll argue that they are better than most. Our service is outstanding, that’s one of the things we’re known for in the industry. And when you have that combination of the best products and best service that means that your price can be a little bit higher and that’s also what we target. We’re also known as not being the lowest cost provider in the industry as well.

Roman Leal – Goldman Sachs & Co.

Maybe more on Fleet One, we’ll move to other topics, but help us understand the rationale for choosing Fleet One’s platform versus job processing platform?

Steven Elder

It was actually a pretty easy decision. In couple of years ago, we had made the determination that we wanted to enter the over-the-road marketplace to really round at our products offering. We at that point of time kind of scan the marketplace from which we’re likely acquisition opportunities didn’t really see any.

So, we went down the path of building it organically. We built a, again, it’s a different kind of transaction for that over-the-road marketplace. So, we built a platform to do that and it was up and running and tested. But what we didn’t have is any merchant acceptance yet, we were still working through that at the time that the Fleet One asset became available.

So, theirs is already up and running, it’s installed and 7000 truck stops, it’s hardened, it’s in use. So for us to say do we want to switch over to our platform that really haven’t been tested or do we want to go with theirs, that that’s really in use, that was pretty easy decision to make, we chose to use theirs and we obviously took that charge in the fourth quarter to remove that asset from our books.

Roman Leal – Goldman Sachs & Co.

Sure, as discussing now, the reason why we ask that is most of the conversations post, your recent earnings results have centered around on guidance. And when we shown up [them] was enough that with it here, but it feels like the revenue guidance, the disparity in revenue guidance and EPS guidance versus the Street for example, really suggest that the incremental expenses from the acquisition was kind of dealt to [that]. So underneath that if you strip out the kind of the one-time expenses related to your acquisitions, intangible expenses, integration expenses, EPS would have been a little bit closer to the Streets, is that correct or?

Steven Elder

I think the clearly the guidance we gave last week was $4.30 to $4.50 a share and the Street at the time was I think it was like $4.85 a share, so it was lower, no question. The biggest piece though I don’t think was really related to the Fleet One acquisition, we completed a bond offering at the end of January and although there was lots of press out there about exactly what we did and the rates we’re paying all that, I don’t think it really got into people’s models until we pointed out the fact that there is incremental expense here and it was, it wasn’t cheap, it’s a long-term player on our capital structure and incrementally to where we were and where the analyst models were I think that was the biggest delta with the bond cost. There are clearly integration expenses that we’re planning on next year to Fleet One. I think if that was the only thing we’re talking about nobody would really even blink an eye

Roman Leal – Goldman Sachs & Co.

Sure.

Steven Elder

Although it wasn’t in the models, I don’t think that was the biggest surprise to people.

Roman Leal – Goldman Sachs & Co.

Sure. And as far as incremental investments, are there some that you will call out as one time in nature versus ongoing obviously you need to refinance this ongoing?

Steven Elder

Right, the bonds are going to be there for 10 years and we think that’s a great.

Roman Leal – Goldman Sachs & Co.

Yeah.

Steven Elder

Source of capital for us, but we’ve been able to walk in, the other couple of things that we called out was some integration expenses around Fleet One next year which we sized to $5 million to $6 million next year that’s kind of $0.08 or $0.09 of EPS.

Those are essentially one-time in nature, once you get the integration done, you are done with the integration and we’ll reap the synergy benefits. The other investments that we called out was around globalizing our virtual cards, right now we’ve got a great business, we have three of the four largest OTAs in the U.S. using our product throughout the world and we want to take that product and move it into other geographies, so we can attract more business from our existing customers because travel by its nature is global, but also get the local OTAs and the countries we’ve targeted to sign up to the product that is an investment, I will hesitate some to call one-time because I think if we’re successful in rolling out to the countries we’re targeting right now, there’s another group of countries right behind it that you might see in 2014, that said would necessarily be another incremental investment is probably just a continuation, but you also had some revenue helping to offset that thing. Hopefully, at the end of 2013 not really what we’re guiding most likely to be 2014.

Roman Leal – Goldman Sachs & Co.

Okay, all right and that is a good segway into the (inaudible) solutions, obviously, lot of interest in that part of the business growing very fast, there are lot of small business in there, maybe if you can provide the overview of what the different types of businesses are you know differences among them?

Steven Elder

So there’s really kind of two main products in there, so we talked to some about the virtual card with the payments from the OTAs to the hotels that’s the majority of the whole segment. The other product that we have in there is a PayCard product so rather than employee getting a paper check with an unbanked employee taking that paper check to a check cashing service, give that employee a card, a prepaid card essentially and just load their payroll under that, we’ve got essentially two businesses within the Other Payment segment, one, based in the U.S. and another one that is in Brazil that’s in the PayCard space, overall there, they’re relatively small, you’re talking, 2%, 3%, 4% of total revenues next year for those first, two something like that, it’s not a huge contributors, but we do think that certainly in the U.S. side there’s an excellent cross-sell opportunity with our existing customer base and even more or so with the over-the-road space, the types of employees who can benefit from the PayCard products are typically more blue- collar workers and they are working for our fleet customers today. So, approaching those fleet customers being the trusted brand for them already, it’s a nice cross-sell opportunity for them to add in a PayCard as well.

UNIK in Brazil does, it’s a PayCard product, that has some new answers whether in Brazil it’s much more common for an employee to ask for a cash advance on against their pay and that’s one of their features that they have, so they earn a little bit of interest income off of that, but for the most part it’s a PayCard product just like rapid! PayCard in Florida.

Roman Leal – Goldman Sachs & Co.

Great, maybe focusing a little bit on the OTA product, help us think about the barriers to entry in that business, that’s probably one of the biggest questions that we receive on that type of business, to understand the grow, they have great clients, but it feels like that could be a pretty competitive space, so help us, how do you differentiate in this space?

Steven Elder

I would say the competition in those spaces (inaudible) business starting clearly, but it probably feels that way, because it’s a MasterCard based product and technically I guess any issuing bank out there can issue MasterCards, right.

What we’ve developed though is a very, very specialized product, there is a lots of banks out there that have Virtual Card products they’re very broad, they are very general, they apply to lots of different kinds of payments. What we have is a very, very focused payment with a tremendous amount of features and functionality around a hotel payment.

An OTA making a payment to a hotel and all the things that can go wrong with that payment and all the things to flag and check if that payments going to the system, that’s really the advantage, it’s the depth of the features and functionality and the knowledge we have about how those payments work and that’s the differentiator. We’ve also created that whole backend reconciliation process that I talked about that, really has nothing to do with the type of credit product that it is whether it’s VISA MasterCard or something else, that automation process, one of our favorite stats is we started this product a dozen years ago with Priceline and at that time they had about 30 people in their back-office that were reconciling payments, checking they had one big statement of here is all the charges and then they had to check it off [manually] and after they implemented our product they brought those 30 people down to two, so creating tremendous back-office efficiency for our customers that backend reconciliation process is the engine that does that and that’s not something that’s simply comes by being a MasterCard issuer.

Roman Leal – Goldman Sachs & Co.

Sure. And as you think about how to spare more growth in that part of the business, it seems like you have two different goals, one is five different verticals…

Steven Elder

Yeah.

Roman Leal – Goldman Sachs & Co.

You can have that solution, roll that solution and take that solution internationally maybe if we kind of talk about both points and how are you doing there?

Steven Elder

Yeah, I mean that’s exactly right, we’ve got a world class product that’s working of hotels take that product and take the same principles and apply it to different verticals and we’ve identified a couple of publicly the insurance and warranty vertical mostly around auto payments, auto insurance claims, warranty claims around automobiles and the healthcare vertical.

So those are the two verticals that we’re focused on mostly here in the U.S., we were fortunate up this summer to sign a very large customer in the healthcare vertical a company called PaySpan which is a third-party healthcare payments organization.

So their niche is that they work with insurance companies, third-party administrators to make payments on behalf of those insurance companies, to the hospitals and doctors. Again privately held but pretty widely known by the buy side and sell side following our stock with there, the second largest organization like this in the U.S. and they processed between $35 billion and $40 billion worth of payments annually last year in the growing business. So they are in the process, we are in the process of implementing some of their customers, some of their insurance company and third-party administrators onto our virtual card product, so, that instead of that doctor, hospital whatever accepting on ACH for the charge, we’re going to use our virtual card payment for that charge. The second vertical, we talked about the insurance and warranty vertical, something we’ve been at for quite sometime we’ve had customers in there for several years.

Last quarter was a great quarter for us, we actually grew the spend of the purchase volume in that vertical by more than 30%, so it was an excellent quarter. What we don’t have though is that one big marquee name we don’t have the all state insurance or something like that everybody knows. We have companies like APCO, companies like Southwest Reinsurance and Mercury Insurance, not necessarily household names to everyone. But, bringing together a number of these smaller guys to really build a nice little niche.

So, going back to the travel side, second part of that taking that product and bring into the verticals. The second part of that is take what is a world class product, we have the blue chip customer list, three of the four largest OTAs in the U.S. and frankly in the world some of the biggest OTAs using this product everyday, but taking that same product and bringing out to other geographies companies in Europe, in Asia, in South America.

To do that what we’re, part of the investment that we’re making is to become an issuer in some of those local geographies, we mentioned six countries in our call last week, three of which we’re already operating in being Brazil, Australia and the U.K. and then three others that we’re not currently operating in Hong Kong, Singapore and Thailand. But targeting those countries based on the characteristics being where our existing customers already have volumes certainly where we can switch those over to get more of their wallet shares if you will, but also those countries have OTAs of their own, that we feel like we can penetrate and based on the relative ease of entering the country from a regulatory perspective.

The next got really around getting licensed or getting regulated in those countries, so that we are able to be an issuer, getting the agreement of MasterCard in our case to extend our license into those countries, so that we can be an issuer there, getting the processes inline, getting the servicing structure in place, getting the sales force in place. So there is a lot some lead time before we’re going to get some real revenue out of that.

But we see this in the geographies we’re targeting as the $500 million total revenue opportunity, total addressable market. So we see this is as a very big opportunity one that’s opened to us at this time and one that we want to attack, because we don’t want, we would open for somebody else to hone in on.

Roman Leal – Goldman Sachs & Co.

Lot of interesting points there, maybe first follow-up on PaySpan, when that deal is announced I think the kind of the implicit guidance there, you are giving was about $1 billion purchase volume from that partnership in 2013, it doesn’t seem like you’re changing that stat, it does feel like you expect to build it backend loaded, help us understand what drove that?

Steven Elder

Yeah, I think you’re right on both counts, you know what, we never said anything about when the billion dollars is going to happen, I think when you’re talking about a product that is ramping, you’re talking about implementing insurance companies one at a time, you’ve got to get those done right, and they just kind of naturally build on each other. So, despite the nature of how we’re implementing, you’re going to get some of that backend loading anyway. We’re couldn’t be more excited about the opportunity to work with PaySpan, it’s a great organization and I think, the two companies are working tremendously well together.

We’re in the process right now of really building and join go-to-market strategy, building that value proposition for the insurance companies and the providers so that when we get to the bigger customers it’s not going to be a question it’s just going to be question, it’s just going to be proven out already. So progressing exactly as we would, we expect it internally I think it’s fair to say that most outside of the country, outside of WEX. Maybe they are hoping for to be a little bit faster. But I think it is progressing as we expected it to be.

Roman Leal – Goldman Sachs & Co.

Okay. On the international front, a lot of the countries, some of you’re kind of entering, is there difference in pipeline maybe the conversations you had in potential pointers. Do you feel some will be quicker than others?

Steven Elder

I do think some will be quicker than others, I think, most of the countries within already it’s going to be a little bit easier. We made an acquisition of Virtual Card (inaudible) in the U.K. last year called Corporate Pay. Slightly different products a debit based prepaid kind of platform versus our credit kind of platform, but essentially doing the same thing. We’ve already got a bank sponsor that we’re working within the U.K. So I’ve been sponsor fuel so, that’s already in place. So it’s probably a little bit further head in some of the other countries.

We’re also I would say little bit further head in Australia, we’ve got actual clients who have signed up with us. Using our U.S. issue product and incurring the cross-border fees, which is really what we’re trying to avoid by getting that local issuance. But they see a value proposition even with the cross-border fees. So would be that much greater when we can avoid that fee in the future. But we talked about signing Webjet, the second largest OTA in Australia already. So, yeah, some, already some success down there.

Roman Leal – Goldman Sachs & Co.

Great. I think we got 30 minutes into the conversation what I mentioning gas prices so that’s (inaudible) but you always spoke the gas prices in your core business. Maybe as a broad question, you just changed your hedging strategy kind of reducing that [hedge] help us think about timing of that because there was kind of round the heels of the Fleet One acquisition when kind of increase the fleet exposure and you said, you want to give more expose to the possible upside or the supplements or the direction of that?

Steven Elder

So just kind of taking a step back for just for a moment before we get into the details, we are in percentage based fees on fuel transaction, so when fuel prices are higher that 20 gallon transaction cost more and therefore the revenue we earn in that percentage is little bit higher. So that’s where the exposure comes from and it works obviously the same way in reverse.

As you mentioned, we changed our policy slightly in September, it was slightly before we announce the Fleet One acquisition, but really something we’ve been talking about for years, this is a regular recurring conversation at the board level of this policy, I don’t think, it was a big change, we went from covering 80% of our estimated fuel price related earnings exposure down to 60% and really I would say that there was two factors that kind of drove the decision.

The first, was the other payment side of the business is the much bigger part of the business than it was even just a couple of years ago. And therefore the cash flows of the business so that much more stable not related to fuel prices and more stable. The second factor is the color kind of structures that we’ve been using, simply economically didn’t payout, we’ve been doing this for seven, eight years now, there is really late 2008 and pretty much 2009 when the whole market really kind of crash that’s really the only time we had money coming back to us.

So, economically they just didn’t work out, we still think it’s important we still think that we need to have some visibility in the fuel prices, some predictability in our cash flows, but we wanted to lessen that, because it simply just wasn’t.

Roman Leal – Goldman Sachs & Co.

Sure. Broad question before open it up some questions from the audience. Help us think about the long-term targets as far as maybe, how much revenue you want to derive from the other payments solution, what the margin profile will look like if that becomes a larger component of the business, help us if you relate the actual potentials of both sides of the business?

Steven Elder

I mean there is no doubt that the other payment side of the business is growing faster right. I’d say overall our kind of long-term targets are 8% to 10% revenue growth excluding the impacts of fuel prices, excluding any kinds of acquisitions. Right now, you’re getting maybe half of that from the fuel side of the business and then the other half is coming from the other payment side of the business. So, given much smaller, it’s obviously much faster growing. The margins are somewhat different, I would say when the bars our fuel business and the margins and you’re comparing to the margins there they are extraordinarily high margins, I mean you’re talking high 40% to 100% EBITDA margins overall for the business, the fuel side being higher than the other payment side.

So, a lot of businesses would be thrilled to have even the margins we have in our other payment side, but we’re forced to talk about how we can keep those fuel margins up there. In a long-term, I think we outsource a lot of the processing on that other payment side of the business, so we incur a lot in our service fee expense line and it’s not as scalable as we’d like it to be, so in a long-term that’s the area to focus on, it is either we’re going to have to change the relationship we have with the types of contracts we have and how we pay so that it becomes more scalable or we’ll have to figure out a way to bring it in-house or bring it somewhere else so that we get that scale that we need, long-term yield I think we’ll be able, we’ll be fine, we’ll be able to offset lot of that difference as the other payments grows, but we’ve got strategies and that we’ve been thinking about to address that.

Unidentified Analyst

Okay. Maybe I – let’s see if there any questions from the audience. Well, I think we have a mic as well. Can we have the mic here at front?

Question-and-Answer Session

Unidentified Analyst

Thanks. What are the hurdles to pushing your PayCard through [the old] fleet customers, because you’ve had that business for a couple of years now right?

Steven Elder

Just a little bit shorter two years ago that we bought it, yeah.

Unidentified Analyst

Yeah.

Steven Elder

The hurdle really is the direct correlation between how many sales reps we have and how much new business we signed. One of the investments we’re making this year frankly is to add a lot more sales reps, when we brought the company, there was the whole company, I think only had 18 people in it, right, so it was a very small company, we double the sales force once, we’re going to double it again next year.

And we’ve seen the results from that from the sale reps that we have we can see that clear correlation between the speed of growth and from the number of reps, so we’re going to investing it again. If we saw that same thing we occur over the next two years, we wouldn’t hesitate to do the same thing to add more sales reps.

In the end, I think that the PayCard business is very new to most folks right now. Five years from now, ten years from now we really believe that the, you’re going to have scale on the business, right, so we want to get bigger in this area and to place we want to invest in, so that we can be one those scale players.

Unidentified Analyst

(Question Inaudible).

Roman Leal – Goldman Sachs & Co.

How penetrated is it, you really early innings not really penetrated at all. Any other question, maybe one last for me then, on the M&A front it seems one of your competitors has been pretty acquisitive in the core fleet space internationally. It seems like your acquisitions internationally has focused more on the other payment solutions. Is that just to make sure the pipeline you’re seeing, are you really just focused more on growing international away from the core fleet business?

Steven Elder

We’re absolutely interested in growing the fleet business internationally there is no question. I think the deals that our competitors complete are deals, if they wanted to complete and we may or may not within that all interested. And I’ll think whatever they’re doing is necessarily going to dictate what we’re doing.

We’ve got our strategy, we’re going to follow it and we’re going to continue down the path we’re on. I would disagree somewhat with your point the second largest acquisition we’ve ever done within Australia was a fuel card business, right, so it is $300 million deal carries into a new marketplace and the company that looks very much like us. Very, very happy with how that has turned out. And I think the market reaction has been very favorable and how that’s turned out, would we like to do that more absolutely and we’ve got a group of folks that is what their job is to analyze those opportunities and bring them home. So very focused there, we had completed a couple of deals on the other payment segment outside of the U.S.

We do want to expand geographically if it comes to the other payment segment first that’s fine. But I think we will eventually get to the fleet side of the business as well.

Unidentified Analyst

One quick one, on competition with large financials, we saw U.S. bank make an acquisition in the space, how does that change the positioning for you guys and how do you think about large financials as potential competitors right?

Steven Elder

They would really be only one that are competitor in the space, yeah, I think they could be natural competitors, but I think that for the most part of the Big Banks have a bias towards bigger marketplaces, they typically have a bias to wanting to be vendors, and the fuel card businesses, there is no lending per se here these are charge cards, they are not revolving balance cards for the most part. U.S. banks happens to have the Voyager asset, I’d say when you look at the marketplace they are probably the smallest player in the marketplace, I am sure, it’s one that they are happy with because it’s a profitable entity and droves up lot of cash for them, but the Voyager was actually lost enough a lot of market share over the last four, five years. The federal government being a big chunk of that, but also quite a bit of their commercial businesses has moved to other competitors as well.

Roman Leal – Goldman Sachs & Co.

One last one, just on the payment technologies that it pumps themselves, the form factor change whether it’s digital wallets or EMV, how is your kind of core customer base sort of think about both could be coming down the product in terms of new payment technologies?

Steven Elder

Yeah, I think the oil companies, we don’t believe, we’re going to be early adaptors of this, the factors that every gas station has a – have an integrated POS device that is expensive to change out, and it’s difficult for them to see any kind of returns on that. So, I don’t think they are going to be early adaptors. At the same time, we’re ready when those, if and when those mobile payments come, we’ve tested it with our some of our oil companies partners already we know that the systems will work, we’ve done it already on live transactions. We’ve invested some dollars in creating a mobile application called Octane, which you can all download today, and it will show you where the cheapest price of fuel is in your five or ten mile radius, it will tell you exactly when the last transaction was, it was great for first responders, around [Stanley] for example, to know exactly who had fuel, and who was still able to pump fuel, who had electricity, who had supply. But the idea behind it is to say get our customers at custom to our mobile application and when that payment technology eventually comes to the industry and that is another feature for our mobile app.

Unidentified Analyst

(Question Inaudible)

Steven Elder

The competitors in the virtual card space are typically Big Banks, right, so those Big Banks have, they have a virtual card product and we compete against them everyday, that said, they kind of have one very broad product that applies to all kinds of different customers, all kinds of different payments. The difference is we’ve got one very focused product, it’s is a niche product, but it is just focused on those hotel payments, the deep feature rich functionality and that’s why we can compete and win against the Big Banks.

Unidentified Analyst

Okay, I think, we’re just out of time. So, thank you very much.

Steven Elder

Thank you very much.

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Source: Wright Express' Management Presents at Goldman Sachs & Co. Technology and Internet Conference 2013 (Transcript)
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