Payment Technology in Dealerships: Hidden Costs & Missed Opportunities| Episode 12

Every dealership takes payments.

But very few dealerships ever stop to look at how those payments actually flow through the business — and the friction that process creates.

In this episode of Dealer Tech Talk, Simon Verona breaks down the four main types of dealership payments and the operational challenges behind each one.

From standalone card machines to online payments, bank transfers, and pay later products — most dealerships are still relying on disconnected systems that create unnecessary admin, errors, and inefficiencies.

In this episode, we cover:

• The four main types of payments dealerships process
 • Why card machines are still disconnected from the DMS
 • The hidden complexity behind online payments
 • Why bank transfers create reconciliation headaches
 • How pay later products can increase sales — but also admin
 • The real cost of disconnected payment systems
 • Why the industry is moving toward integrated payment infrastructure
 • A simple exercise to uncover friction in your own dealership

If you want to reduce admin, improve accuracy, and streamline operations, this episode will change how you think about payments.

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Transcript

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So instead of a quick answer, it turns into a mini investigation. And that investigation costs time, and time is money. And that's why payment technology is starting to evolve. The industry is moving towards integrated and unified payment systems, where payments aren't separate tools. They're part of the dealership DMS platform itself. Welcome to Dealer Tech Talk, where we explore how technology is transforming car and motorhome dealerships. I'm Simon Verona, and this podcast is sponsored by DMS Navigator, the dealer management system which helps dealers to become more efficient, more profitable, and deliver better customer service, and by my old companion, the customer app that builds loyalty and keeps buyers connected. Today, we're talking about something every dealership deals with every single day. Payments. Now, on the surface, payments sound simple. The customer pays. A dealership receives the money. Job done. But anyone who's worked inside a dealership knows it's rarely that simple. Because today's dealerships are processing multiple different types of payments. And in many cases, they're handled through completely separate systems, which creates a lot of opportunity for mistakes, for confusion, for wasted time. So today we're going to look at the four main types of payments dealerships deal with. The credit card payments, both in-person, online card payments, bank transfers, and now pay later products. More importantly, why are these systems often disconnected from the dealership's core systems and the problems that that creates? The first type of payment that you take are credit card payments taken in person. We've taken those for years. These might be for a vehicle deposit, for accessories, for servicing, or even a payment for a deal. The customer taps or inserts their cards on a card machine at the desk, payment goes through, receipt prints. But here's the problem: the car terminal's normally not connected to the DMS system, which generates the payment in the accounting system. So the staff member still needs to manually record that payment inside the system. And that introduces the first opportunity for errors. The wrong amount might have been entered into the terminal, or the wrong amount might be recorded in the system. And the two therefore don't always match. The second type of payment is online card payments. Many dealerships now allow customers to pay deposits online or pay invoices through payment links or make payments directly through their website. This is great for customer convenience. But again, these systems often sit outside the dealership software. The payment might go through a payment gateway or an e-commerce platform or a standalone payment link. And the DMS may not automatically know that that payment's happened. So someone in the dealership still needs to check the payment system, find the transaction, manually update the deal or the invoice or whatever it could be imposed to. And again, that's manual steps, which generates again opportunities for errors. The third type of payment is bank transfer. This is extremely common in vehicle sales. A customer sent bank details, they transfer the money, and the dealership waits for funds to arrive. But bank transfers introduce a completely different set of problems. For example, customers entering the wrong amount or entering no reference or a reference that makes no sense or something vague like car payment. And when the payment arrives at the dealership bank account, someone, somewhere normally in the accounts team, has to work out who sent the money, what deal it related to, and whether the amount is correct or not. It's not unusual for accounting staff to spend hours matching payments to deals. Sometimes even walking around the dealership, asking, does anyone know who sent this payment? The fourth category we're seeing more of is pay later products. They're becoming more common, especially for servicing, repairs, and for sale of accessories. From the customer's perspective, they can split the payment into three or more simple monthly payments or defer the payment longer. They're great benefit because they're proven to improve conversion, particularly things like red and amber work in the workshop. But again, these systems often operate outside of dealership systems. So the payment approval may happen in one platform, but the dealership still has to manually record it somewhere else. And if those records aren't updated correctly, it causes confusion later, especially when you're accounting and reconciling those payments. This often means, though, that customer service teams don't offer a pay later product as it causes them more administration because of that disconnect and potentially cause, therefore, a reduction in potential conversion and a reduction in sales. These disconnected systems create a lot of small problems. And those problems add up. If you've ever worked in a dealership, you've probably seen the situation. Someone from accounts team walking around the showroom, holding a credit card slip, trying to work out who processed the payment, what it was for, which deal it belongs to. Or another very common scenario, someone's got an invoice in front of them, and they're trying to answer the simple question from the other perspective. Has this invoice been paid? The answer might be in the credit card terminal merchant system, the bank account, the online payment gateway, or even recording a spreadsheet somewhere. So instead of a quick answer, it turns into a mini investigation. And that investigation costs time, and time is money. And that's why payment technology is starting to evolve. The industry is moving towards integrated and unified payment systems, where payments aren't separate tools. They're part of the dealership DMS platform itself. So when a customer makes a payment, it automatically links to the deal, records the amount, and updates accounting. No manual entry, no searching through systems, no walking around with credit card slips. Where the payments are all made into one merchant account, the dealership therefore doesn't have to worry about how the payment's made. Once it's made, they all show up in exactly the same way for reporting purposes. Some modern systems are starting to introduce this kind of integration. For example, solutions like navigator payments, connect payments directly with the dealership software. But the bigger point isn't about a single product, it's the direction the industry is taking. Dealership payments are moving towards being fully integrated into the dealership systems. Dealerships today handle those form payment types, the credit cards in person, online payments, bank transfers, and pay later products. But in many dealerships, these payments are still processed through separate systems, which therefore creates those errors, creates that confusion, and creates unnecessary admin work. Before you wrap up this episode, here's something practical you can do in your dealership this week. Take a look at how payments actually work in your business today. Start by listing the different types of payments you accept and where you accept them through. For most dealerships, that will include credit card payments in person, online car payments, bank transfers, and now pay later products as well. And follow the work through for each flow the workflow. Now follow the workflow for each one. Start from the moment the payment is taken and follow it all the way through to final reconciliation in your accounts. And ask yourself, where is the payment taken? Which system process it? Who records it in the DMS? How does accounting confirms been received? And how has it been reconciled? You'll often discover that the process is far more complicated than it first appears. Multiple systems, manual entries, cross-checking between platforms, and sometimes a bit of detective work in there as well. And when you map this process out like this, you'll start to see that friction at work. And that friction has a cost. It costs time, it creates mistakes, and it slows down the business. So the action this week is simple. Map out your workflows, understand how many systems are involved, and calculate the cost of the friction in your processes. Because once you see the friction, you can start to remove it. Thanks for listening to Dealer Tech Talk. Again, don't forget to subscribe on Spotify, Apple Podcasts, or Google Podcasts so you never miss an episode. This episode is sponsored by DMS Navigator and my old companion. I'm Simon Verona. Join me next time for more ways to simplify dealership success with technology.