Dealers should know their options before they either choose to keep their existing provider or find a new payments partner. The game has changed largely in the last 5 years, which means that the top players must adapt or find a new game.
Has your provider acclimated their solutions to the needs of your dealership?
Let’s discuss 7 concepts or key areas and see why a change could produce several positive results for your dealerships.
1. Dealer Advocacy
This one is simple. Does your payments partner specialize in dealerships? Does their process help you in each department, from sales to fixed operations? Do they accurately manage your larger transactions and batch deposits to maximize cash flow? These are just a few questions that can show the differences between those providers that are truly “dealer-focused” and those that provide the same solutions for several industry verticals. In all cases, dealerships need a partner that understands the dealership business, accounting, departmental differences, customer requirements and more.
*Hint, if you are using a provider that simply provides you with a stand-alone payments’ terminal, without any other technology or functionality, you are NOT working with a dealer-specific provider.
2. Payments Functionality
This one is much larger, because of the various modern payments’ options available to consumers. This requires a “system” or platform with systematic processes that work like an “IF and THEN” formula. For example, you struggle with capturing payments quickly and efficiently, but your terminal only offers 2 types of input. The concept of efficiency just went out of the window. There is much more than just Card present (swipe, chip and hopefully tap) and Card Not-present (key-entered into the device). Added functionality offers your customers multiple ways to pay, giving them options, making them happy. These options also get your dealership paid quickly and effectively during the most critical part of the sales process.
*Hint, if you have open receivables and limited ways to capture payment, this may be worth looking elsewhere.
Warning this is not a sexy topic, but extremely important with respect to payments. Should you have to do ALL the work to make sure your dealership and your customers’ sensitive data are protected? NO! That is why you work with partners that know both industries, protocols, best practices, and that even have systems to prevent your dealership from making wrong decisions. Fraud is here and now and bigger than ever. Your payments system should have limits and protections in place, not only to keep your PCI compliant, but to prevent loss. Dealerships have a lot of exposure, especially in the “card not-present” world.
*Hint, if you are currently paying a PCI NON-compliance fee on your statement, your provider is not helping you to also prevent fraud.
Now this one is fun but does have a lot of moving parts. The technological side of payments is what helps customize systems to work for dealerships. Payment acceptance (in ALL its various forms), transaction management, REPORTING, DMS integrations, user management and more. All of this helps to make your dealerships more productive (time is money) and provides exceptional customer convenience. We live in a world of convenience, where in a lot of cases, it takes precedence over cost. Being the largest of retailers, in a very competitive market, this concept can truly dictate your overall success. Another thing about technology, if designed correctly, can also make the user experience easier, not more challenging. The brains of the operation should be working behind the scenes to create logic and present solutions automatically, without manual input.
*Hint, if you are worried that by upgrading, you are also creating more processes or confusion, than you would be with the right provider.
This is very important, but this is somewhat divided in half. Dealers that want to surcharge and those that do not. This is also very important to mention that not all payments providers are playing by the rules and many of which are “overly profiting” from your customers. Why would you pay more than 3%, when your costs before you started surcharging were closer to 2-2.25%? I know! It is because your provider is making large profits at your customers’ expense. Yes, you are still paying for debit cards in some capacity, but if you are surcharging on these, you are in fact, breaking the rules. There is a fine line here between “sharing the fees” and totally getting hosed on rates, just so that you can pass them along. Interchange and Assessments are the basis for pricing with card processing. Not to say that flat rates are bad, but when you look at the providers that are overly capitalizing on this component, they are likely the same providers that don’t have technology, integrations, or functionality to create the whole solution for your dealership. For those dealers that don’t want to surcharge, cool! You don’t have to and that is your choice. Obviously, price in this scenario is very important, but again, make sure you know your effective rates. Merchant providers are notorious for hiding fees and making confusing statements. You don’t have to work with them, there are better options.
*Hint, work with a provider that has interest in having a relationship, that you know and can call anytime. These folks are less likely to be devious or raise rates.
The concept of being flexible, malleable, and compliant. Now that’s a concept. How often are you stuck with old processes, simply because your provider cannot make changes? I know it is often because we see it all the time. Payment providers in this space must be able to make real-time changes, tweaks, or adjustments, simply based on this ever-changing industry. It is hard for larger providers to do this for 2 reasons. They don’t have relationships with their dealers to learn about what could be improved and they don’t make it a priority. Example – Is it possible to “automatically” send a text/email payment request to customers, if the RO is not paid within 15 minutes of it being in invoice status? The answer should be, “I don’t see why not!” Not every dealer is going to want that function, but I also bet there are others that might.
*Hint, you know your business better than anyone, make sure you have options to improve your payment solutions for a greater outcome.
Last but not least. We know everyone must start somewhere, but there is also a lot to be said for having experience. Providers that have been in the industry for years have seen the trends, learned from mistakes, and know the competition, will have better insight into how to guide you now and in the future. If your rep or provider is new to payments or dealership space, there is a chance they may not be offering the best solutions. Your payments provider should be “Certified Payments Professional” and should have a vast knowledge of the various components of payments processing. As mentioned above, there are a lot of moving parts and if there is a kink somewhere, it could throw off the whole operation. These types of “kinks” are also what costs more money.
*Hint, do your research, ask for referrals, and make sure your provider has history and experience with both payments and dealerships.
Please reach out to us at firstname.lastname@example.org with all questions or to see a demo of our system!