Good morning. My name is Bridget, and I will be your conference operator today. At this time, I would like to welcome everyone to the WEX Q2 2017 Earnings Conference Call Operator Instructions]. And now I would like to turn the call over to Steve Elder. Mr. Elder, you may begin your conference.

Thank you, Bridget, and good morning, everyone. With me today is Melissa Smith, our President and CEO; and our CFO, Roberto Simon. The press release we issued earlier this morning has been posted to the Investor Relations section of our website at wexinc.com. A copy of the release has also been included in an 8-K we submitted to the SEC. As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income, during our call. Adjusted net income for this year's second quarter excludes unrealized gains and losses on derivatives, net foreign currency re-measurement gains and losses, acquisition-related ticking fees, acquisition-related intangible amortization, other acquisition and divestiture-related items, stock-based compensation, restructuring and other costs, an impairment charge related to in-sourcing some of our technology, debt issuance cost amortization, ANI adjustments attributable to non-controlling interest and certain tax-related items. The company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis, as we are unable to predict certain elements that are included in reported GAAP results. Please see Exhibit 1 to the press release for an explanation and reconciliation of adjusted net income to GAAP net income. I would also like to remind you that we will discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the Risk Factors identified in our annual report on Form 10-K filed with the SEC on March 6, 2017 and subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligations to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. With that, I'll turn the call over to Melissa Smith.

Good morning, everyone, and thank you for joining us today. We're pleased to report another very strong performance this quarter, highlighted by a significant top line beat, and bottom line results at the upper end of our guidance range. Revenue this quarter grew an impressive 30% over the 2016 second quarter, reaching approximately $304 million. Net income on a GAAP basis was $0.40 per diluted share, and we generated adjusted net income of $1.26 per share, up 15%. Underlying fundamentals and success across all 3 segments contributed to this quarter's exceptional revenue growth as we close out the first half of 2017. Before I go into segment details, I'd like to provide updates on the strategic pillars I laid out at the beginning of 2017. We've now posted 2 consecutive quarters of particularly impressive revenue growth, 41% growth in the first quarter, and 30% growth in the second quarter, again to continued broad-based momentum throughout the business. We continued the trend with strong organic growth this quarter. We've had great success year-to-date with everything from re-signing five multiyear U.S. contracts with private-label partners like Sunoco and Circle K, to adding new partners for the future, such as Chevron and Bank of America, while expanding geographic reach with existing partners globally. We continue to be very competitive in each of our markets, and our pipelines have yielded major wins across our segments. I feel very good about the underlying growth of the business. Secondly, we remained at the forefront of innovation by regularly introducing new features that improve our competitive positions with each release. Our track record of winning business is largely attributable to our underlying technology and the products that sit on top of our technology platforms. As I mentioned last quarter, we have a new CTO on board, and…

Thank you, Melissa, and good morning, everyone. For the second quarter of 2017, our total revenue was $303.9 million, a 30% increase over the prior year period and well above the high end of our guidance range of $286 million to $296 million. Net income on a GAAP basis for the second quarter was $17.1 million or $0.40 per diluted share compared to $12.6 million or $0.32 per diluted share for the second quarter last year. Non-GAAP adjusted net income was $54.2 million or $1.26 per diluted share, up 15% from $1.10 per diluted share for the same period last year and at the top of our guidance range. We clearly exceeded our revenue expectations in all of our three segments, despite the small headwinds in fuel prices versus guidance, and I'm very pleased with the results as we continue to expand into key markets and regions. The recent new business wins, backed by our healthy sales pipeline, makes us confident in our future growth and the read in the quarter makes us comfortable raising our revenue guidance for the full year. During the second quarter, Fleet Solutions segment achieved $200.3 million in revenue, an increase of 39% or $56.3 million compared to the prior year. Payment processing transactions increased to 108.1 million or 15% versus Q2 last year. Nonpayment processing revenue increased $39.4 million as compared to last year, primarily as a result of our price modernization efforts and EFS. Finally, our average domestic fuel price in Q2 was $2.41 versus $2.29 in Q2 last year, slightly below our guidance. We see a number of positive trends across the fleet segment. In our North American fleet business, for instance, fuel volume was favorable versus our assumptions for the quarter, indicative of the same-store sales relief that Melissa mentioned and…

[Operator Instructions] And your first question comes from Sanjay Sakhrani with KBW.

I guess I have a question on the credit losses. I understand the fraud-related impacts have been affecting you guys. I guess, as we look forward in your new guidance, I mean, what gives you comfort that that's an appropriate range? Have you guys been taking steps and seeing some results as it relates to those steps?

Yes, and let me just -- let me start by talking a little bit about what we're seeing in the marketplace, and then Roberto is going to fill in the details there. So as we mentioned on the call, we're seeing this accelerated shift into -- with fraud into places that don't have chips, so that aren't EMV compliant, which includes the fuel pumps. And so we've seen much more activity over the last 2 quarters than we have historically. Fraud is something that we've seen historically be part of this industry, but it's been at a relatively low amount. And when it's been spiking in the marketplace, we've been able to respond quickly to that historically. And so we've got a history of being able to do that. I'm very confident with the actions that Roberto is going to talk about, that we'll be able to bring this down. And I'd also say I want to make sure that we are very focused on the growth of the business. We're taking market share, and we're not moving off that as we make sure that we're moving to take the right actions here. So Roberto is going to get into more detail about that.

Thanks, Melissa, for the summary and update. So let me walk you through what we are doing and what we are seeing at this point. The first thing, when we spoke about April last quarter, we were just beginning to put our enhanced measure into place. The first thing we did, we began to actively engage our customers and merchants to make sure that initiative we were about to implement did have minimal impact to them. Second, while our systems always had card authorization controls, they were used at the discretion of the fleets and the partners. Now we have placed portfolio-wide limits on the number of transactions and amount to the fuel purchases. With these changes, we are seeing increasing declines in authorizations and the size [indiscernible] is trending significantly down. Finally, as we mentioned earlier, we are improving our capabilities in both preventing and detecting fraudulent behavior and adding a new technology. So when you look to the balance of the year, we are still anticipating higher-than-normal levels of fraud and have included them in our guidance, but fraud is expected to trend down both in terms of size and the number of incidences through the end of the year.

And I guess, I know you guys don't have chips because many of the fuel pumps don't accept EMV chip-enabled cards. But if you put chips on the card, then wouldn't the liability reside with, I guess, it would still reside with you?

Yes, the liability resides with us, and this is a place in the marketplace that has been pushed out in terms of EMV compliance. And what I would say, though, is more broadly, you're starting to see some other people in the marketplace do liability shift into the merchants. And we've been working with, as Roberto said, with our partners which include the merchants, and with our customers to make sure that we're reducing the exposure. But we also want to make sure that there's insufficient incentive on the merchants to lock down their fuel locations from a security perspective.

And then when we look at the revised guidance that you guys gave, when we think about the revenue increase and obviously, the associated EPS decline on the top end, does the revenue range include now some of the relationships that are coming on in the back part of the year? And what specifically are there? And then the EPS guidance revision, that's mainly related to the credit losses, the one that's going lower?

Sanjay, this is Roberto. Let me start by giving you a general overview on the revised guidance. Since the beginning of the year, we have been raising our midpoint ranges on EPS once we include the noise of fuel prices, which clearly speaks to the overall health of our business. If you recall in Q1, our midpoint EPS was $5.30. On Q2, we raised it to $5.325. And in this quarter, when reporting the midpoint range, without excluding fuel prices of $0.11, we will be trading up to $5.36. So let me walk you quickly through the puts and takes. The first thing clearly is that we have raised our year revenue guidance, and we have reflected the extraordinary Q2 that we have got and the high expectations that we have for the second half of the year. The second thing, obviously, we have reflected our best estimate on the credit loss based on the information that we have so far. And the third thing that has impacted the guidance positively, obviously, have been that we have incorporated the new tier repricing changes into our guidance, although a piece of that was already in the previous guidance. So I will summarize it as follows: very strong business fundamentals that more than absorb the credit loss impact and the contingent sensitivity on the fuel price changes.

Your next question comes from the line of Ramsey El-Assal with Jefferies.

You mentioned that the EFS synergies were coming in ahead of schedule. Can you see any incremental visibility to maybe an increased total synergy amount? Or is it just a question of the timing shifting?

So overall, when we talked about the transaction, we said there'd be $25 million worth of synergies that we'd get over three years. And we thought it would happen pro rata. And the source of the synergies were coming from a bunch of different categories, the most obvious one where we had overlapping costs. But then we've also been able to go through and find areas of the business where we can extend either relationship that we have from one part of the business into the other or a contract. And then the part that we thought that would be the longest part in the pull was around the platform consolidations that we're migrating our over-the-road customers onto EFS's platform. That part, in particular, is tracking ahead of schedule. I'd say in general, the synergies are coming faster than we expected. And overall, we're still targeting $25 million in synergies, but I would say there's a little bit actually, there's more confidence with every quarter that goes by and what we can do beyond that. And I'd say most of that's coming from revenue synergies, which we really hadn't anticipated originally in the deal model.

A follow-up on a different topic, given all of the sort of turmoil and the sort of bear rate on your competitor fleet core, have you seen any impact in the marketplace related to that issue? Do customers bring it up? Are you gaining any competitive advantage from it?

We're taking market share in the marketplace, and I say that broadly amongst all of our competitors. You're referring to one of them. And part of what I like about the place where we're at right now, I can go to any part of the business and talk about what we have in the pipelines, how we're bringing those in and how we're retaining customers once they come on board. And we've got a really great sales team that's sitting out there in all parts of the world. I'd say specific to the North American fleet business, we are doing a really great job of renewing our private-label contracts, which are long-term contracts. I talked about 5 that we just renewed most recently. And so it's been a great opportunity to lock in those relationships into long-term agreements. And I'd also say just we're seeing really good momentum, both in terms of EFS customer wins in the North American fleet business and in bringing on new business of all different size and scale. Some of them are small, and you won't see us mention them, but they're factoring up into the overall volume. Our North American fleet, we disclosed our total fuel transactions that just in the North American fleet itself is up over 10% this quarter.

Your next question comes from the line of Oscar Turner with SunTrust.

So my first question is just on the higher fraud losses. Is the fraudulent activity there still restricted to one geography, as I believe was the case in 2Q? Or I guess, in 1Q? Or are you seeing a broader incidence of fraud?

And you're referring to states within the United States that we're talking about. And there's certainly more going on in two states: Texas and Florida, than the rest of the country. So I'd say it's not quite as pinpointed as it was in the first quarter, but there certainly are places that there's more exposure, and those are locations that we're working with in terms of looking at sites and measures we can do to have increased levels of security. And also and Roberto mentioned about working with law enforcement. We have always done that, and we're certainly doing that now as well.

Okay. And then the second question just on WEX Health. So the segment continues to grow impressively, but we noticed a slowdown in purchase volume. So just wondering if you could provide any color on what drove the decel in purchase volume from last quarter? And does this change your view around long-term growth expectations for that business?

Yes, we talked about the segment growing 33%, and that's organic growth. And so the part that we are disclosing right now is the purchase volume, which is one piece of the revenue. If you aggregate purchase volume and what we're gaining for other fees, including SaaS fees, it grew over 20%. And so that's just representative of mix in this particular quarter, but we feel good about the business whether bringing in new prospects and how we're ramping up those prospects. And Bank of America, we talked about specifically that's just a tremendous win. And kudos to the team at WEX Health for bringing that on and going through a very successful conversion.

Your next question comes from the line of Darrin Peller with Barclays.

Just to follow up a bit more on the credit loss side for a moment. I know fraud, obviously, had a big impact. But I guess, just to give us a little more color on the consumer behavior patterns you're seeing. Have you still been seeing consumers continuing to shift paying bills more on time? Or -- and then I know there were some changes implemented in Q2. You've been touching on. A little more color on, if there's actually been any impact on that so far. And just a quick follow-up on the European RFP side if you can.

So Darrin, I'm going to take the first question on the credit loss. As we said during the call, when you exclude the impact on credit loss of fraud, the numbers are well in line with our expectations for this quarter, and we have not seen any signs to think differently at this point when we project into the second half of the year. So we feel the same way as we were reflected in the guidance accordingly based on our historical seasonality changes. So that's in relation to the credit loss.

And then -- yes, and then I think you had a follow-on question around late fee activity and what we're seeing for customer behavior patterns and...

Yes, exactly. Just trying to get a sense whether -- exactly, behavior would be great.

Yes, its stabilized. It actually looks pretty consistent with what we saw in the first quarter. And so we feel good about that measurement, and I think in part for us is learning as we rolled in also the new EFS portfolio and getting predictability around that, but we're -- we are on track with what we expected. And then your third question was around the European RFPs. Okay. So the European RFPs, whenever someone ask me about, I always feel like it's -- I give just the same answer. They've run through their process. We're participating in the process. We feel good about the prospects we have. Their time lines elongate, and I don't think that's representative of anything other than these are big decisions, and they tend to move slowly through their respective committees as they go through their approval process. And so we feel good about the marketplace. We feel good about what we've done with the WEX business that we have in Europe and our ability to build upon that. But we're still in a wait-and-see window with the specific RFPs.

Okay. But the deals are still there. They're still in progress. There are still active RFP discussions going on just to be clear?

Yes, that's right. That's right. And then -- and I would say in Asia, we -- it gets overlooked. But for us, we think that's a great marketplace. We continue to win business in that market, which is much more rapidly moving. And so then we talked about the Chevron win, and that's a portfolio that we intend to convert in 2018, which will -- it represents 5 countries in Asia.

And your next question comes from Bob Napoli with William Blair.

Just to beat a dead horse because it's on the credit side. The guidance range that you have for this year, 18 to 23 basis points, how many of those basis points are fraud? And what is typical for fraud historically?

Yes. So Bob, this is Roberto. As we said when we look into the balance of the year and as we said, we still anticipate higher-than-normal levels of fraud and our number is in the guidance. I would say to you that around 50% will be regular credit losses, and the other 50% will be fraud. And as you know, we have also reflected now in both second half of the quarter, Q3 and Q4, we have also included the seasonality trends in our business on the regular credit loss. And on the fraud piece, as I said, we are expecting to trend down both in terms of size and the numbers of incidences through the second half of the year.

And what would be normal fraud? I mean, how much is -- so it's 50-50? Would it be normally 80-20? Or 80% regular and 20% fraud?

No, higher than that. We typically have a basis point of fraud. So think the vast majority of what we would show in credit losses are related to what you would think is just credit quality.

And how -- I mean, is it 1,000 locations where this fraud is happening, 100, 50? I mean, this is something that seems very fixable.

Agreed, agreed. It's fixable. I'd say there's two answers to that. The first part is around points of compromise. And so the points of compromise are where the skimming device is being put into the point-of-sale device. And then once the information is skimmed, it's used in many more locations than the original. You think the original source is more narrow than the places that are being used. And so Roberto talked about all the different places of changes that we've already made and changes that we're making into the future. And so a lot of that is containing the size of loss and the number of the losses and then just the speed with which we find this. And we've been working with law enforcement authorities on the places of compromise and more broadly as we look at the trend that's happening in the marketplace.

Number of locations?

Number of locations. the number of locations in which it is occurring is the majority of it, I would say under 300, where the majority of the locations that are higher, but it's much higher, that in terms of all locations are being impacted. So there are points of focus that are around where you see concentration.

Now your competitor, your big competitor hasn't -- at least, they haven't been reported earnings yet, but on the first quarter call, they didn't seem to have the same problem. Is that because they're using more of the MasterCard network on a relative basis? Or why do you think they didn't or you just think--?

Well, I can't speak to them. All I can say is that more broadly we're hearing that this is an issue in the industry. We just had our partner meeting here a couple of weeks ago, and we certainly heard from them that this is a broader issue that they're seeing in the marketplace, not specific to us.

Okay. I mean, a lot of good news in the quarter on the revenue side. So I hate to focus all on the credit side. But that's the mover. But do you think that you'll get that credit back to normal levels in 2018 on the fraud side or close to?

What I would say Bob, is that this is our expectations. As we have guided for the second half, we have a Q3 and Q4 trending down fraud. And our expectation is that obviously, when getting into 2018, now to have it at lower levels. I think as we move along into Q3, we will have more news on where we are, and we will provide the update as we move along.

And your next question comes from the line of Tim Willi with Wells Fargo.

Just a couple of questions. First, in the over-the-road market where you've -- the Fleet One and EFS, is there any way to think about what you're seeing in terms of a rebound in same-store sales for that segment of the market versus the more traditional midsized, smaller vehicles? Just sort of curious. There's been some, I think, encouraging data around the heavy truck market relative to how it was sort of lagging in the fall. And I'm sort of curious if you have any similar other observations or thoughts.

Yes, I would say that to your point, we are seeing an improvement in transportation in general. It's one of the asset fees that is up year-over-year and up significantly. So I think that more broadly, there does seem to be positive trends in what we're seeing in the U.S. economy. And I would say that transportation is one segment of that, but construction was another that I would point out. Oil and gas is a little bit more obvious. We've seen an increase in improvement there, but we're seeing positive trends in the construction trades, which is something that I think is particularly positive when you think about overall consumer trends.

A quick housekeeping question, and then I had one other, but account servicing revenue in fleet seem to sort of pop up relative to the number of accounts you had if you look at it, like revenue per account, versus what we'd seen in the prior quarters. I was just sort of curious if there's any kind of call out there that was specific to 2Q? Or is that reflective of another pricing move that layered in this quarter? It just jumped out at me as a bit stronger than I would have thought.

This is Roberto. What I would say to you is on this as part of the price modernization changes that we have implementing in the past 18 months, a piece of it will be falling in this category. And the other thing you have to remember that the acquisition of EFS, we are still have not overlapped it. And part of the EFS revenue comes from that underline as well. So when you compare both the price modernization changes plus the EFS, that is still is not overlapping year-over-year, this is why you see this jump in growth.

And then, I guess, just the last question was around sort of the whole B2B-type business. MasterCard, Visa continue to articulate pretty clear visions about wanting to move that part of the market more aggressively. And I'm just sort of curious around your thoughts, Melissa, as you think about areas to move that virtual card and corporate payments business. Are there any initiatives that are sort of moving closer to the top of your to-do list? Or anything along those lines that we should think about out over the next couple of years with that business and not just sort of a travel-centric story here?

We talked about travel because that's where the bulk of the spend is, but we have seen good growth even with our existing customers that are non-travel. And in terms of other applications, one of the places that I'd point to is what we're seeing in Asia. And it's a marketplace that we've been in at a relatively short period of time, but we're seeing a lot of demand in the marketplace. And the demand is for products that are a little bit modified from what we have. So I do expect that you're going to see more of the corporate payments piece of the business growing over time. And the combination of that is some of the places that we're testing in the marketplace now and some of the places we see just future growth opportunity, both in terms of new products but also new market expansion opportunities for us. And there's nothing I'd call out now that I would say that you're going to see an immediate lift for, but it is part of our longer-term strategy.

And your next question comes from Ashish Sabadra with Deutsche Bank.

Good results in the quarter, and especially, it looks like pretty solid momentum across all businesses in terms of pipelines and new wins. I just jumped -- I'll ask another follow-up question on the fraud losses. So just what gives you comfort? So Melissa, you mentioned a lot of activity that you've done, including engaging customers and setting limits on purchase limits. But what gives you confidence that these issues won't prop up at other locations going forward? Can you talk about what technology investment that you've made in order to have more detective and preventative controls going forward?

This is Roberto. For us, the most important thing now is what I said before. I mean, we have seen now as part of all the changes and the things we are doing, we are seeing clearly increased declines in authorizations and the size of the average losses is trending down. So there are already KPIs in place that are giving us the comfort that the fraud losses should be trending down. And as you said, and we said out this quarter and in last quarter, we are finalizing all the implementation of a new technology that should give us a lot of upside going forward.

My question was around the Chevron contract. Is there an upfront payment for that contract? And when should we expect that payment to come? Or when is that payment expected?

So I'm going to talk a little bit broadly. I don't want to talk about the specifics of any customer. But hypothetically, what we normally would do with the portfolio conversion is that we would evaluate the value of the portfolio, we make a payment associated with that. And then sometimes, there are other upfront payments based on what we see as the overall value of the portfolio and the life of the contracts. And this has got a 10-year contract life. And so this would be the period of time that we would be going through that type of investment. And then if there were payments made around the portfolio that's typically done close to the period of time where the actual portfolio transfers over. And so at that point, you then start getting the recurring revenue as well. And so you think of that as you're paying upfront for the business, but you're getting recurring revenue stream. And then at the end of the contract, there's similar value for it.

That's helpful. And maybe just a quick housekeeping question. I'm not sure if you talked about the processing rate that was in the fleet segment was slightly down compared to the first quarter. Was that purely mix related? Any color there you can provide there?

Yes, this is Roberto. Let me give you a quick color. If you recall, since the acquisition of EFS, obviously, that net interchange is trending down because the business of EFS is a bit different from our North American fleet business. It has been steady since the EFS acquisition. It has trended down a bit, especially in the last 2 quarters. In the U.S., we are not seeing any major change. However, in the European business, where we get the spreads, we have had positive spreads in both Q1 and Q2, and therefore, it's impacting negatively our rate. But the underlying business in North America is in good shape, and we don't have any interchange erosion there.

And your next question comes from the line of James Schneider with Goldman Sachs.

Maybe just to kind of go back to the same-store sales trends, good to see the improvement there, especially in the transportation segment. Melissa, can you maybe give us a little bit of a color on what other verticals may have improved? And are there any verticals that are still lagging? And do you expect those to improve?

Sure. So if you look across the portfolio, same-store sales was up 2% and the bigger pieces were what's happening in oil and gas. That's up almost 30%. And then, transportation would be the next biggest. Construction and -- would be the next biggest. So I'd call out those 3 as the largest of the percentage increases. And it's really pretty broad based. So I'd say generally, most -- everything is up if slightly. And the only place -- the places that are down are SFC's that are so small. But I think you're getting into some variances in terms of just sample size. So overall, it's a question whether it's slightly flat to up, in some cases, up 4% or 5%. And the biggest ones that are flat was public administration. It's down just a hair, which is kind of pulling a little bit of the total down. But overall, I think it's a good time. I guess what I took away from this is -- and look at the last several quarters, this has been something that's been a little bit of a drag, and it's caused us some concern over what was happening in the economy. Just having this move to something that's positive and what we're seeing in underlying trends within the business in the U.S., it gives us confidence in the overall strength of the economy.

That's helpful color. And then maybe just as a follow-up, can you maybe clarify on the IT outsourced functions that you were pulling back in house? It sounds like that was part of the strategic review by your new CTO. Or can you talk about what functions those were? And as a result of pulling them back in house, are you going to be incurring kind of additional OpEx to maintain that IT internally on a go-forward basis? And maybe quantify that level?

Sure. I'll start and I'm sure Roberto will add on here. This is Melissa. So the beginning of that, I'd say that we looked across the whole spectrum of our IT systems. We think of IT and technology is a strength of ours, and it's a place that we've been investing in, and we'll continue to invest in, in the future. And some of the trends that we're thinking about for the future are around globalization and speed. And so we're particularly focused on places that we can create scale through consolidation and places in the enterprise that we want to make sure that is allowed to move really quickly in terms of just being able to adopt what's needed in the marketplace. And when you get to the pieces that we decided to in-source, it was really largely around this idea of we want to be able to move fast, we want to have control in order to do that. And so there were infrastructure plays. They would be new customer-facing applications. And so we decided to bring that back in-house. And I mentioned in the script that we didn't expect that to have an impact on our expense structure. And I'm sure Roberto will add into more details on that. But I would say more broadly, we're looking at places that we can create speed, level capability with our individual platforms and consolidation where appropriate. And EFS is a good example of a place that we're going through a platform consolidation, which we think, at the end of the day, is good for us from a cost perspective but also good for our customers as they get added functionality as part of that migration.

So what I will add -- thanks, Melissa, is two things. Number one is obviously, through this transition, as this transition continues within the next 12 months or so, we do expect some additional small, onetime charges. But what is important is that this move will not increase our recorded base cost, and it's meant to improve, as Melissa said, on our customer experience and our service level and our internal infrastructure.

And your next question comes from Glenn Greene with Oppenheimer.

A couple of questions on the fuel side. Obviously, with early the fleet confusion, I would say, in the industry. Have you seen any specifically any notable change in competitive dynamics specifically at the low end of the fleet market?

We're actually having a record year in terms of what we're bringing in for new business in our North American inside sales group. It's about combination of our inside sales group and outbound group that's really targeting that small end of the marketplace. And so it's part of the market that's always been interesting for us, and we've been going after that marketplace aggressively. But I'd say we are bringing on even more business this year than normal. And I don't know that I'd point to anything that is markedly different in the landscape. But we feel good about the market share that we're taking and the new business that we're bringing on.

Okay. Roberto, could you help us just sort of quantify the EFS contribution in the quarter and maybe by segment?

Yes. I mean, you'll recall when we started reporting EFS last year, I mean, it's approximately around 20% on the fleet segment, and it's around $5 million in revenue in the corporate and payment solutions. So this has been steady since the acquisition we have mentioned in a couple of times last year. So this is not changing because the business is growing. And obviously, our EFS business both in the fleet and in the corporate payment solutions are growing as well also.

And our next question comes from the line of Tien-tsin Huang with JPMorgan.

Forgive me if I ask another fraud question. I'm just trying to better understand just the fix and how easy it is. Is it just a software issue in terms of sort of changing the analytics and how you sort of approach authorizations? Or do you ultimately need to even try, I think, even go to a chip card to ultimately resolve it? I'm just trying to understand sort of the different things you might need to do to get to the bottom of it.

There's a combination, there's some tools that we're used in place. You talked about the technology, and then that's one piece of that. But behind the technology is really, and Roberto mentioned this. We have historically handed out tools to our customers in order to have a high level of control, but we'd left it up to them of whether or not they chose to use those tools. And so that's it. And then our first approach really is to tighten those up, and so we think that that's in the best interest of us and the merchants and our customers. And so we've been enhancing the amount of enforced tools that are out there in the marketplace, and so that's one tool. That's one path. And then the second piece is around the new technology, and the new technology just moves the speed of that forward to -- you can do it with the controls in place. But it's just going to enhance the speed, by putting a new technology in place. And then the last part is working with law enforcement, which again is something we've always done, but it's a piece of the process to make sure that you're creating a disincentive for others to enter the marketplace in fraudulent way.

I see. And just on the chip front, I mean, as eventually these pumps, the unattended kiosks switch to chip acceptance, how does that sort of change your thinking longer term around chip in general given what we've seen so far?

It doesn't really change any-- we have intended to migrate to a chip-compliant card. It's something we've been working with both the merchants and our customers on. And it's really -- we've been timing that around when you're going to see adoption within the oil industry. But it's part of the process. And parts of our business are chip enabled and just not North American fleet yet because they aren't at a point where us having a chip would make it any better.

And now I would like to turn the floor back over to our presenters for any closing remarks.

I just wanted to say thank you once again for everyone who joined us today, and we look forward to seeing you again in about three months.