How to embed omnichannel payment experiences in car showrooms and online

02 125 ABM Automotive content How to embed omnichannel payment experiences online and in showroom floors Blog header

Jul 26, 2022 · 6 minutes

Has a customer ever waited in your showroom while your team waits to confirm that their bank transfer had cleared? Has a sale ever fallen through because a customer transferred their money to the wrong bank account – leaving both of you frustrated? Or maybe a customer was keen to pay for a car outright only to find out that card spend is capped at £1,000?

For every potential error and pain point for both the customer and car dealership, there’s an opportunity to enhance the showroom experience. In today’s competitive market, customers are setting the tone on the kind of service they want. And if they don’t receive it, they take their business elsewhere.

Innovation in the payments sector is growing rapidly. If car dealers want to stay ahead of the curve, embedding omnichannel payment processing across every touch point needs to be part of their business strategy. The benefits are twofold – customers experience higher satisfaction, which results in more sales, and dealerships save on costs and have a positive brand sentiment.

Payments innovation for a new automotive experience

Put simply, an omnichannel payment platform gives customers multiple ways to pay in an integrated ecosystem, providing a frictionless experience for users. Customers want a choice of how and when they pay. The payments landscape has changed, and coupled with a change in customer behaviour, when people spend their money, their expectations of the service they get are higher.

Implementing an omnichannel payment process eliminates pain points, such as manual bank transfers going into the wrong account, waiting for funds to clear, high card transaction fees for dealerships, fraud and refund turn-around times. The closer dealers can get to a ‘drive in – drive out’ experience, the closer they are to providing a truly great experience.

Taking advantage of the benefits of account-to-account payments

Manual bank transfers

Buying a car is an important purchase, especially when customers put down big deposits and sometimes even pay in cash. Manual transfers can be riddled with human error. A report in 2021 by payments company Vibepay reported that 25% of people surveyed sent money to the wrong bank account and a quarter of them never saw their money again. Any salesperson wants to make sure that the experience is as smooth as possible, but sending over bank details to the customer to carry out a manual bank transfer could end in misery. The money could end up in the wrong bank account and customers could be left frustrated by the lengthy process of inputting their details.

Dealerships also take a number of deposits over the phone. This process can be time-consuming and can also result in funds going to the wrong account. Both of these scenarios can slow down the buying cycle. Customers don't want to be bogged down with admin and paperwork. They simply want to drive out in their new car.

Powered by Open Banking, account-to-account payment (A2A) can automate and streamline the entire payment process. Customers receive a superior user experience when paying directly from their bank account to that of the dealership. There’s less room for error, and the time saved by departments, who would otherwise have to chase down payments, can be redirected to other parts of the business.

Security

Scammers got away with a staggering £750 million in the first half of 2021. More than ever, shoppers are falling victim to fraud, so it comes as no surprise that security is high on their agendas. Consumer research by Vyne, 68% of respondents said if they could build their ideal payment method, guaranteeing the highest level of security would be very important to them.

Mandated in March 2022 by the Financial Conduct Authority (FCA), Strong Customer Authentication (SCA) now requires online shoppers to verify each payment they’re making with their bank.

The added security is part of the Payment Service Directive 2 (PSD2) , which has introduced an extra layer of two-factor authentication. This means that customers need to confirm each purchase on their banking app through FaceID, by fingerprint or by entering a six-digit code sent to their mobile phones. While the added security is welcomed, it has created a clunkier friction-laden payment experience, leaving customers frustrated.

By using on-device authentication and the banks' own security management, the risk of fraud is dramatically reduced. A frictionless user experience, strong customer authentication and biometric scans for mobile transactions in as little as three clicks can now be offered. A2A removes the friction without lagging on security. 66% of consumers are open to trying new methods of online payment, showing that there is scope to meet their demands and drive growth through positive customer sentiment.

Card transaction fees and refunds

There were 1.7 billion debit card transactions in January, 37% more than in January 2021 and 15.5% more than January 2020. There were 292.4 million credit card transactions in January, 47.9% more than in January 2021 and 2.6% more than January 2020 - UK Finance.

Fees charged using traditional card methods can soon add up and amount to missed revenue. Not only are these payment methods outdated and expensive, they can also have a ripple effect across the business.

In a scenario where there is a cooling off period and a customer wants a refund, the £10,000 they put down is stuck in refund-limbo while being processed. Not only is the customer out of pocket but dealerships could lose the customer and risk a drop in customer sentiment.

By using Open Banking account-to-account payments, merchants in the automotive sector could potentially save up to 80% compared to card payments. Applying this across the automotive industry, the savings can be massive.
When it comes to refunds, customers no longer need to wait up to seven days for their money; instead, refunds are processed instantly. This removes delays and provides a better experience for the customer.

Overall, the automotive industry can benefit massively from having payment processing costs lowered. There is also a reduction in chargeback risk and dispute, which results in an increase in working capital.

There’s also an opportunity to incentivise customers with instant payouts. Customers can sell their cars back to the dealership and receive the money instantly or swap their car for something cheaper and have it all done on the same day.

Fast, seamless, real-time

Account-to-account payment journeys

1. In the showroom, manual transfer:
2. Customer is at home, paying online:
3. Customer receives an instant refund:
4. More funds for the business:


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