In the past couple of years, the auto retail business has shown remarkable adaptability, changing to meet new demands during the global pandemic. Not only have dealers addressed an array of challenges—inventory depletion, supply chain disruptions, and a skilled labor shortage—while still having some of the most profitable years, but they’ve also responded to evolving consumer buying preferences. Today, 40% of Americans say they’re prepared to configure and purchase a car online, only visiting the dealership for a test drive.Disclosure 1
From sophisticated, tech-based marketing to digital documentation, dealers embrace digital transformation as they strive for efficiency to streamline the buying process. Equally important, savvy auto dealers are welcoming innovations for making and receiving payments.
Faster, easier, and more secure payments
Payment solutions have progressed to become faster, more secure, and easier to execute. New options—from Zelle®, PayPal, and Real Time Payments (RTP), to Same Day ACH—offer consumers and businesses faster ways to exchange funds.
Traditional payment types are plagued with a high risk of fraud. By a wide margin, checks represent the number one fraud risk among payment choices; 63% of respondents in a 2023 survey experienced attempted or actual, check fraud at their organization.Disclosure 2
Newer payment methods are constantly upgraded to offer stronger security measures. Consumer demands for faster settlement and funds availability are spurring the shift to digital payments. The latest payment options reflect society’s broad desire for immediacy and younger purchasers’ expectations for simple, digital execution.
Find the best way to pay
To realize the advantages of new payment types, auto retailers often start with payables, exploring options to manage private-party, used car purchases, efficiently process customer refunds, handle marketing and advertising expenses, and pay contractors, suppliers, and vendors. Processing a paper check creates additional steps for both parties and exposes them to a higher risk of fraud or loss. By moving away from checks, funds can be managed more efficiently and the transaction completed more quickly.
Over the coming years, dealers will need to continue to embrace consumer’s universal push for agility and immediacy. The pressure for the same instant fulfillment that customers experience at other kinds of businesses will extend to every aspect of the way auto retailers market, sell, and close purchases.
As buying becomes more digital, customers—accustomed to Zelle and PayPal experience—will start to expect the same speedy movement of funds for an auto purchase that they see in other transactions in their daily lives.
Yet buyers’ preferences are only one factor to consider in your approach to payments—speed of execution, fees, and the risk of payment reversal are part of the equation as well. Payment options need to align with delivery and fulfillment and integrate with your documentation process.
For now, merchant services remain the preferred means that auto retailers use to secure payment for deposits, in-person sales, and parts and services. A familiar choice for customers, it can be implemented in both face-to-face and e-commerce settings.
Key business payment options
