Companies such as CenPOS, Ingenico and BillingTree are accelerating payments innovation by customizing their technology for the automotive industry.
Dealerships are anxious to shed paper from payments for repairs and car payments, but this trend is "really being driven by the consumer and how the consumer wants to pay at the point of sale," says Thierry Denis, president of Ingenico North America.
"When they walk into a dealer for service or to shop, they want to be able to use a mobile device to shop or pay or access a loyalty card," he says.
Ingenico is combining its point of sale terminal technology with CenPOS' cloud platform to deliver payment technology to auto dealerships, including mobile payments and loyalty programs.
The two companies also plan to use the cloud to aid dealers with EMV-chip card acceptance, with services such as managing the differences between chip-and-PIN vs. chip-and-signature transactions and debit card routing.
"We want to be able to quickly deliver new features that we see in the retail environment. When we see something new out there the retailers can adopt it quickly in the cloud," Denis says.
CenPOS has a national network of more than 1,200 auto dealerships. The company will gradually deploy Ingenico iSC250 devices across these dealerships, and the two companies plan to target other dealerships across North America.
"Auto dealers have a crowd mentality. When there's a new piece of technology in one, others will follow," Denis says.
Many consumers already perform price comparisons on their phones while visiting a car lot, says Christopher Justice, CEO of CenPOS. "Therefore, dealerships operate in a true omni-channel environment and must be able to accept all forms of payment form any form factor," Justice says.
Auto dealerships also accept payments from diverse sources, Justice says. "The various departments within the dealership must process various methods from online, [mail and telephone order], and 'card present' payments across multiple software systems."
BillingTree, a company that sells payments automation services, is also focusing on auto dealers with its mix of web and mobile technology.
"Auto finance is similar to the accounts receivable market in a lot of ways," says Marya Ulis, director of strategic alliance at BillingTree, who says there's a lag in adoption of mobile and other emerging payments technology.
"We have found a lot of people making payments with ACH, which is what you would expect with people having payments taking out of their bank accounts. But we also found a lot of people paying with cash, cards or checks that are mailed or brought into a dealer," she says. "[The segment] is playing catch-up with the rest of the market."
While auto dealerships have not embraced mobile payments to the extent that other industries have, the opportunity to do so is apparent, says Jordan McKee, an analyst at Yankee Group.
"Mobile point of sale provides an obvious way for smaller auto dealerships who currently don't accept credit cards to revolutionize their business model," McKee says. "For larger dealerships, the opportunity for mobile point of sale exists as well. Allowing for on-the-spot credit card acceptance provides auto dealerships and repair shops with immediate revenue that may have otherwise taken weeks, if not months, to obtain through standard billing,"
There are further opportunities for engagement with mobile payment apps for auto dealerships, McKee says.
"For instance, placing QR codes on automobiles that link to detailed information and informative videos would provide customers with a reason to download the application and deliver an improved shopping experience," he says.