Innovative payments drive better outcomes for the automotive industry.

Managing inventory financing, paying suppliers, navigating credit card surcharging*—the automotive sector payments landscape is complex and interconnected. We recently surveyed financial leaders from multiple sectors to see how they plan to use payment innovation to improve business outcomes. Change is underway: 82% of automotive organizations are prioritizing integrating payment platforms with other technologies. And across all sectors, businesses are innovating in response to:

An accelerating pace of change

How and what technology consumers use to pay is changing fast—64% say change is so quick it’s hard to keep up with trends.

Rising fraud

59% say evolving fraud threats make it harder than ever to update payment strategy.

Customer expectations

62% say customers demand frictionless, one-stop integrated payment solutions.

How is the automotive sector different?

Traditionally, the auto sector has been more sales-focused vs. customer-focused. As customers demand seamless shopping transactions everywhere they go, the mindset within the automotive industry is shifting. By offering flexible payment options and enhancing service departments, dealerships are improving customer experience to increase satisfaction, loyalty and earnings. Here’s where respondents are investing dollars:

While only 40% of our respondents rate their existing payment strategy as advanced or very advanced, an impressive 70% say upgrading payments acceptance would give their automotive business a competitive advantage. Here’s a look at where they plan to innovate and what’s motivating them.  

63%

of respondents want to automate processes to decrease staff time spent managing payment acceptance operations.

What’s driving change? 

69% of automotive industry respondents—higher than any other industry—say that staff shortages are driving increasing investment in AI/automation technology around the automotive payment processing experience.

75%

agree they are embracing new opportunities because of the convergence of banking and payments.

Example:

Service and parts can be expensive for some consumers. Tapping into a Buy Now Pay Later or a POS Financing solution combines the power of payments with banking to offer your customers a convenient and affordable way of paying for their auto service.

93%

have implemented or are planning to implement credit card surcharging sometime in the future.

Why?

The cost of goods and services continues to increase, which means ticket sizes are also on the increase. One way to help control this cost is with credit card surcharging, which passes some or all of the interchange acceptance cost to the credit cardholder. 

Streamlined processes offer strategic opportunities

Embedded financing and lending (building financing into the sales process so customers can be pre-approved online or at the dealership) is leading this shift. Integrating back-end operations into the banking system for more payroll, supplier payments, and inventory financing management is also a factor.

Automotive industry respondents are enthusiastic about payment innovation and its ability to improve business performance, but there are roadblocks they need to overcome.

Knowledge gap

• 66% struggle to keep up with payment innovation. 
• 73% say they’d innovate more if they better understood emerging technologies.
• 43% say their organization lacks technology skills. 

Budget and infrastructure limitations

• 51% say their biggest challenge to business payment acceptance transformation is outdated technology 
• 51% say they struggle to demonstrate sufficient ROI to gain leadership buy-in 

Game-changing AI

Automotive businesses are exploring how automation and AI can help lower costs, fight fraud, and improve workflow. Here’s how our respondents plan to integrate AI: 

• 61% will invest in upskilling staff to work more with AI/automation  
• 50% will increase automation in external payment acceptance processes 
• 65% will increase AI/automation for internal payment operation processes 

And where they are seeing a positive impact: 

• 45% report improvements to their invoice processing and management approach.
• 41% see improvements to fraud detection and prevention capabilities. 

Even incremental steps toward innovation in automotive merchant services can benefit businesses and customers. 65% of respondents say customer satisfaction rose in the past year, and the same percentage say operational efficiency increased. Building on that momentum, businesses are adding more flexible payment and service options and working with providers to optimize payment strategies.

Our newest Payment Strategy Report, How Payment Innovation Is Helping Finance Leaders Achieve Revenue Growth, explores how transforming payments and operations can help streamline operations, grow your customer base, control costs, and help drive ROI.  

Download the full report now or request a call from one of our automotive payment solutions experts to discuss dealer merchant services.  

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