Fuelling a modern customer experience

Read time: 5 mins        Added date: 21/02/2025

How can car dealerships enable seamless payments?

Other than a house, buying a car is one of the most significant purchases a person can make. It’s therefore important that when taking deposits or balance payments, car dealerships offer their customers both ease and reassurance through a frictionless payment experience. From the dealership’s point of view, it’s crucial that the payment process is low-cost and simple, needing as little time and resource as possible. 

So which roadblocks are car dealerships facing when implementing an excellent payment experience, and how can dealerships overcome them? 

Connectivity Breakdown

The Dealer Management System (DMS) is the linchpin of a car dealership that connects and runs almost every aspect of the business. But it has traditionally been the case that the DMS has not been able to connect directly to the dealership’s payment system. This has led to fragmentation, which can be costly. 

For the car dealership, this fragmentation demands resources to manage since employees need to gather data from multiple sources. This is especially true in terms of manual reconciliation, which can be time consuming, resource intensive, and ultimately expensive. The disjuncture between the payment system and the DMS also affects customers too. It increases the risk of security issues, delays in terms of both payments and refunds, and the potential for a poor experience.  

A smooth payment process must start with a unified approach to the internal systems used by car dealerships. By integrating payments into the DMS, car dealerships stand not only to reduce costs on their side, but also to improve the customer experience. 

A complex journey

Firms in the automotive industry should also consider the role of payments within the sales journey itself. Automotive sales involve the taking of deposit or balance payments, which can be cumbersome – again involving lengthy manual reconciliation. 

Servicing is another area where payment processing costs can be high. The requirement to make all servicing payments in person through a terminal can cause bottlenecks for customers.  

Finally, the ordering of parts may also represent a challenge in the context of payments. Ordering parts often requires remote payments – usually taken by phone – which can put a strain on resources when making outbound calls to customers. In addition, taking the payment by phone could also represent a potential security risk. 

An effective payment experience must cater to these examples – making sure that in each case, it saves time and costs while enhancing the customer experience.

 

Driving a positive customer experience

The value of seamless payments is not, however, just about the internal requirements of the business – it also extends beyond this to customer expectation. In the seven years since the implementation of Open Banking in the UK, customers have grown accustomed to frictionless payments.

In many industries, payments have become firmly embedded within the fabric of the customer journey – consider taxi fares that are paid automatically at the conclusion of the journey. Other innovations such as the ‘one-click’ checkout have simplified the payment experience, removing intermediary steps and ultimately encouraging customers to spend more.

The drive towards fast, hassle-free payments has therefore set a precedent among customers. In a recent survey, 78% of respondents said that they prioritise convenience when making a payment, making it the most influential factor in their payment choice. Similarly, 36% of respondents mentioned speed as a crucial factor when making a payment.

This prioritisation of speed and efficiency is reflected in customer spending behaviour. Aggregated and anonymised spending data sourced from Lloyds Banking Group’s 26 million retail customers suggests that between December 2023 and December 2024, customer spending on the purchase, maintenance and repair of motor vehicles decreased by 3.5%.1 In the context of decreasing spend and a competitive landscape, dealerships should focus on making the payment process as easy as possible for customers.

Customers are therefore developing an increasing appetite for speed and ease. Businesses now need to cater to this or face damage to their brand perception and credibility.

The route forward

Considering these challenges, how can dealerships achieve an excellent payment process? Together with our strategic partnerships and integrations, Lloyds Cardnet offers a solution that can make payments simpler, easier and more efficient across the entire dealership. We can integrate the ability to take payments into the DMS, creating a superior customer experience and improving operational efficiency.

Dealerships can initiate payment requests through the DMS and take these payments using various methods, including card terminals, card ‘pay-by-link’, and Open Banking. As a result, we can eliminate many of the challenges faced by dealerships. With our solution, card payments benefit from automatic reconciliation within the DMS – making them faster, simpler and cheaper. It also automatically sends daily reports to the dealership’s accounts department for easy daily banking.

Similarly, card ‘pay-by-link’ and Open Banking transfers make remote payments easier and more secure, removing bottlenecks and allowing customers to make their payments whenever needed. We also offer intelligent payment routing, allowing dealerships to select the payment method based on value. This enables them to offer the best customer experience while managing costs.

“Historically, dealerships have faced significant challenges when taking payments – and the heart of this problem lies in the disconnect between the payment system and the DMS,” said Ben Morrison, Associate Director at Lloyds Cardnet.

 

By integrating payments into the DMS, we’re opening up new possibilities for dealerships, providing customers with choice, security and flexibility, and ultimately driving positive change when it comes to the customer experience.

Ben Morrison Associate Director, Lloyds Cardnet

The Lloyds Cardnet approach

As an experienced bank-owned acquirer, Lloyds Cardnet underpins this solution. With over 30 years in acquiring and processing over 3.1 million transactions per day, we have the means to support your payment activities.

What’s more, we offer dedicated sector-specialist relationship managers who possess an expert understanding of the automotive industry. As Lloyds Banking Group, we have a relationship with 24 of the top 50 dealership groups, and can actively support organisations in the sector.

To learn more about how Lloyds Cardnet can unlock the potential of payments within your automotive business, speak to a member of our team. 

1Data sourced from Lloyds Bank Market Intelligence.

Cardnet® is a registered trademark of Lloyds Bank plc.