Payment processing in retail automotive presents a complex web of operational challenges, ranging from strict regulatory compliance risks to hidden costs that quietly drain bottom-line revenue. On today’s episode of Inside Automotive, we’re joined once again by Angelo Mendola, President and Chief Operating Officer at Priority Payments Local, and David Spisak, CEO of Disruptive Growth Solutions, to examine how dealers can navigate payment processing hurdles, automate accounting workflows, and capture massive net profit opportunities hiding in plain sight.
While many dealer executives operate under the assumption that payment processing regulations primarily fall on card issuers or processing vendors, data privacy standards and federal guidelines apply to every entity that touches customer financial data, putting sales, service, and parts departments directly in the regulatory crosshairs. With heightened scrutiny from the Federal Trade Commission (FTC), state attorneys general, and aggressive law firms seeking class-action opportunities, incomplete records or sloppy processing protocols can result in multi-million-dollar liabilities that threaten a group’s overall enterprise value.
“You need to be able to take that transaction from the estimate to the invoice ready, to payment taken all the way through the dealership to accounting." – Angelo Mendola
Navigating payment compliance
According to Spisak and Mendola, addressing compliance requires proactive internal oversight rather than passive trust in terminal hardware. Mendola continued to emphasize that dealers cannot simply assume a payment terminal is operating compliantly just because it performs a given function. True compliance demands an end-to-end workflow, he says, that secures customer data from the initial service estimate or sales quote all the way through to final accounting reconciliation.
Beyond regulatory exposure, however, traditional payment processing methods generate substantial administrative drag across the dealership. Accounting teams still waste valuable hours tracking down unmatched credit card charges across various departments. Modern processing platforms solve this friction by syncing payment data directly with core dealer management systems, instantly reconciling invoices and eliminating the need for manual tracking.
Simultaneously, shifting consumer behaviors mean dealerships must adapt to a wide variety of modern payment methods. Customers expect fast, flexible, and contactless transaction options that mirror top-tier online retailers:
- Supporting digital wallets, tap-to-pay, Venmo, and text-to-pay options caters directly to buyers who prefer handling transactions entirely on their smartphones.
- Offering buy-now-pay-later options allows customers to split unexpected service or parts bills into manageable payments, driving higher repair order approvals.
- Deploying secure remote checkout links reduces front-counter wait times and provides built-in fraud mitigation tools, such as 3D Secure authentication.
Tech stack audits
As vehicle profit margins continue to normalize across the industry, dealer principals must scrutinize operational overhead to protect net income. Passing credit card processing fees along to consumers while offering fee-free alternatives like debit or cash allows dealership groups to recover substantial operating expenses. For multi-store operations, reclaiming these fees can immediately add hundreds of thousands of dollars in pure net profit per rooftop every year.
"Most dealers have not reviewed and audited their tech stack since before COVID-19, right? They have the same tech stack and yet the world has changed incredibly... Unless you have technology that is solving a real problem... you got to take a hard look. Chances are you have things in your tech stack that you probably should be getting rid of right now." – David Spisak
Unlocking these savings requires dealership leadership to hold their technology stacks accountable through rigorous audits. Spisak noted that most dealers have not thoroughly reviewed their vendor tech stacks since before the pandemic, leaving outdated or redundant tools in place that no longer serve the business. By auditing current software, eliminating duplicate platforms, and ensuring seamless integration between payment systems and core DMS software, dealers can significantly boost profitability without needing to sell another vehicle or write another repair order.
