A report released on Friday revealed that the earnings of U.S. car dealers have recently decreased from the record levels achieved in 2022, due to the impact of high interest rates and inflation on margins. Despite this, the latest Haig Report indicated that profits at auto dealerships have still remained high.

High margins on new cars and big gains from fixed operations have been the main reasons for these profits. Although there is an expectation that profits will decline in the future as new vehicle inventories increase and pricing power weakens, most dealers don't expect the decline to be immediate or substantial.

In fact, it is predicted that profits per store in 2024 will still be more than double the pre-pandemic levels. Overall, many dealers remain optimistic about the future.

The U.S. automotive industry continues to evolve, as do the payment methods used by dealerships to process transactions.

Traditionally, dealer organizations have been rather conventional when it comes to adopting technological advancements in payment methods. However, changes in car buying and selling behaviors are pushing for significant and transformative changes in the car sales industry.

As digital natives become more prevalent in the car market, they bring entirely new expectations when it comes to purchasing and selling used cars. Additionally, older generations are also picking up new habits. Due to their exposure to online experiences like Amazon, car buyers and used car sellers are increasingly demanding omnichannel customer experiences. They conduct research and make selections differently from their non-digital predecessors and expect the same level of capabilities and service quality when dealing with car dealers as they receive in other aspects of their digital lives.

Although satisfying customers' needs may seem like a simple task, creating the essential abilities to do so demands considerable effort. This process extends well beyond the realm of websites. In recent years, contactless payments, digital wallets, and other modern payment solutions have emerged as popular alternatives to traditional methods like cash and checks.

The rise of online sales, coupled with a significant effort to avoid in-person purchasing during the COVID-19 pandemic, has resulted in a new norm. Customers now expect to not only browse comprehensive car configurations online but also to buy a new car or sell a used one through digital means.

Public dealership groups in the U.S. are experiencing sustained growth in digital sales, with some retailers selling thousands of cars through online sales platforms. Additionally, several dealers report that at least half of their transactions involve some form of online activity.

In this article, we name some of the latest trends in payment processing for car dealerships in the USA, including the benefits of contactless payments, the rise of digital wallets, and more.

Additionally, contactless payments can be processed more quickly than traditional methods, which can help dealerships streamline their operations and increase efficiency. Initially, this business model successfully attracted car buyers, particularly during the pandemic when online shopping and contactless transactions gained popularity.

Accepting digital wallets can be a way for dealerships to stay ahead of the competition and appeal to younger, tech-savvy customers.

McKinsey says that in two years, more than two-thirds of Americans will have a digital wallet, and many of them will likely have more than one. The number of people who plan to use three or more digital wallets in the future rose sharply from 18 percent in 2021 to 30 percent in 2022, according to last year's survey.

Alan Haig, an automotive retail consultant and president of Haig Partners, stated to ABC News that the transition towards digital retail is beneficial for dealerships that adopt it. However, those that fail to do so will lose customers and suffer the negative effects of this trend.

Unlike other companies that may take 3-5 days to process payments, Carment, based on Whillet's embedded finance solution, is a payment provider for dealerships that offers instant payment processing for purchasing used cars.

The platform enables direct transfers from business accounts to personal accounts or bank cards, replacing outdated payment methods. The system ensures secure transactions, providing protection against fraud and other security threats to both dealerships and customers. Additionally, all funds are safeguarded by Carment's trusted bank partner.

Instead of accepting cash or checks, dealerships can offer customers the option to pay via ACH, which can be a faster, more convenient, more secure, and more cost-effective way for dealerships to process transactions, especially for customers who prefer to pay using bank account details rather than credit cards.

ACH payments can also be used for other types of transactions, such as lease payments, financing payments, and service payments. However, not all customers may be comfortable using ACH payments, and the traditional method can take several days.