In our experience at TCM, dealerships want a few key things in a payments solution. They want technology that simply works, low rates, top service, and a solution that will make the finance department happy. These are things that we work relentlessly to deliver with our credit card processing.
Payment Technology That Works for Dealerships
The first thing car dealerships tend to ask for is technology that simply works. First, this means high quality credit card machines in the sales and service areas. They need to accept all credit cards, even international credit cards. When there are small transactions, it is helpful to support tap or Apple Pay for convenience. The credit card machines need to be low profile, robust, and simple for staff to use.
Auto dealerships may also take credit card payments remotely. They take payments over the phone or allow customers to receive an email invoice which they can pay online. These need to be simple and intuitive for their customers. Some dealerships send an invoice to customers before they pick up their car after servicing allowing them to speed up the checkout process.
Lowest Credit Card Processing Rates for the Auto Industry
Auto dealers need to keep costs low to make a profit. Some payment processors charge 3% or more including hidden fees which makes it more difficult for a car dealership to generate a good profit.
Getting low payment processing rates is particularly important for car dealerships because of the large transaction sizes. Most of the transaction size at a dealership is the cost of goods, so a large percentage fee is particularly impactful. It is critical for auto dealerships to keep the percentage fees low in credit card processing.
TCM has been on a mission to lower the cost of payment processing. This is one reason why it is a service that car dealerships appreciate.
Top Customer Service in Payments
When choosing a payment processor, businesses focus on customer service surprisingly little. However, what is interesting to know is that most businesses leave their payment processor due to poor customer service.
There are two main things that dealerships want for good customer service. The first is to be very responsive. Dealerships don’t want to wait for days to receive an email response and they don’t want to wait on the phone for hours. Fast customer service is mandatory.
The second thing that auto dealers want with customer service is transparency, especially in fees. It is unfortunately very common for fees to slowly creep up over time. Many processors will increase prices twice per year, little by little, without being fully transparent on what is happening. This is something dealerships want to avoid.
Payment processors tend to have 20% to 30% customer churn per year. That’s an incredibly high number. If a processor has 1000 customers, it means 200 to 300 will switch or cancel over the next 12 months. TCM has put so much focus to customer service that its churn is in the low single digits. Almost all customers stay when they join TCM. The ones that do leave are the ones that unfortunately went out of business or have decided they want to try to go without accepting credit cards.
Making the Dealership Finance Department Happy
The finance department is a critical job in auto dealerships. Big ticket sales items, lots of internal fund transfers, huge payrolls, and real estate fees. It’s very complex. This is a key reason that dealerships want payment processors that keep it clean and simple for the finance departments.
To keep it clean and simple means using very transparent pricing structures, simple statements, no hidden or one-off fees, and ability to integrate easily into their accounting process. These are all things that TCM focuses on.
