Dealers are facing growing pressure on payments as margins tighten and customer expectations rise, turning a back-office function into a frontline profit lever, according to Amberly Allen of Priority Commerce Automotive.
The details: Speaking with PYMNTS Senior Editor Hal Levey, Allen attributed the shift to several factors that underscore how different today’s retail market is from 15 years ago.
For example, dealerships now operate at the center of a complex ecosystem involving OEMs, lenders, service providers, and consumers.
Legacy systems remain a major risk, with some dealers experiencing outages that halted operations entirely, preventing them from writing repair orders or completing vehicle sales.
And credit card processing costs are now among dealers’ top 10 expenses, increasing pressure to manage cost-of-acceptance and improve cash flow, Allen said.
“It’s really not just about accepting payments anymore. It’s not just about selling cars anymore,” Allen said. “Dealers are at the heart of a much broader ecosystem, and payments sit right at the center of it.”
Why it matters: Payments are becoming a more consequential part of the business as shrinking margins leave less room for avoidable costs. And how stores handle payment processing, system reliability, and customer communication can now directly affect profitability, cash flow, and the overall retail experience.
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Between the lines: Allen said margin compression, driven by pricing transparency and longer ownership cycles, is forcing dealers to rethink where they make money, and how they protect it, while maintaining transparency with customers.
Surcharging (passing credit card fees on to customers) is gaining traction as a way to offset rising costs.
Offering alternatives such as debit or cash-equivalent payment options can also help dealers address payment-related challenges.
“What’s important is that you communicate with transparency, upfront and often, the payment choices to your customer,” Allen said. “You also have complexity in and around compliance. So, you want to make sure that it is a compliant surcharge and never a cash discount. If done well, it supports profitability. If done poorly, it really could do damage to alienating your customers.”
Putting it in context: Ultimately, Allen argues that payments must be treated as a strategic function rather than a back-office process.
“Dealers are at the center of their own ecosystem, but also at the heart of many local communities and how people earn their living,” she said. “That makes getting payments right more important than ever.”
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