Most people dread tax season, a typically chaotic time when we scramble to get our documents organized in a timely and accurate manner. Some of us get them done quickly, while others wait until the last minute.
After the weight of filing has been relieved, many consumers look forward to receiving tax refunds and, in turn, using those refunds to purchase a new car or pay off their current one. This cycle leads to a busy and exciting time for auto lenders and dealerships.
How Dealerships & Lenders Should Prepare
Now is the time to prepare for tax refund season and maximize business opportunities. Implementing new payment technology that can integrate into your dealer management system (DMS) can simplify the borrower payment experience and pave the way for a profitable season for your business.
Here we cover technology that makes borrower payments less complicated than filing a W-2.
Will that be cash or card?
When was the last time you asked that question? Dated as it may seem, borrowers still prefer using one over the other. Not everyone has access to a bank account, and not everyone wants to carry around large amounts of cash. And you certainly don’t want to turn away a payment.
A robust payment offering will support multiple channels so borrowers can pay their way. For example, simplified payments allow tax refunds to process sooner, so you get paid faster.
- Debit cards – Swiped in person or remotely keyed into a web portal, debit cards pull funds directly from a bank account, limiting the transaction to the balance available. Protected by PINs or signatures, know if a transaction is approved or declined in real time.
- Automated Clearing House (ACH) – Borrowers use their routing and account numbers to pay from a bank account without needing a paper check. Convenient for card-not-present transactions, ACH is a lower-cost alternative for businesses than card payments.
- Cash – While cash use has declined in favor of contactless payment methods, some borrowers still prefer to use it because cash payments are instant and guaranteed. While there is no risk of returns, cash can be expensive for a business to process.
Payments from the Comfort of Home
Historically, making a down payment on a new car or paying off a loan required the borrower to come into the dealership or lender location. And while it’s easy to hop out of the test drive and into the lender’s office, modern technology has made in-person payments a thing of the past. Borrowers can pay from anywhere, without assistance.
We rely on our phones for so many things. Recent studies have shown that people check their phones 58 times a day.1 It only makes sense that phones can be used for payments, too. There are several ways to use a phone to pay.
- Interactive Voice Response (IVR)
- IVR is a unique toll-free phone number assigned to a business that a borrower can call to confirm balances due and make a payment towards them. Featuring easy-to-follow prompts and multiple language support, borrowers can pay with a few taps on the phone keypad.
- Mobile Applications
- Mobile payment apps are downloaded from the app store and accessed from a borrower’s phone. They can often be customized to your unique branding and offer borrowers a convenient and secure way to pay using stored payment methods. Mobile apps provide payment history reporting, a single source to view multiple accounts from one place, and realtime balance updates.
- Text Pay
- One text is all it takes to make a payment. Text pay functionality sends a text when payment is due, to which the borrower responds with “PAY.” No login is needed! Many text-to-pay solutions offer chat functionality for borrowers to communicate with support and even offer convenient payment reminders to help increase on-time payments.
No-go on the phone?
Always-available web portals allow borrowers to make one-time payments or register as users for faster future payments through their computer or tablet. In addition, branded payment portals securely store card and ACH payment data for future use, and realtime reporting allows borrowers to track how close they are to paying off their loans.
A Faster Way to Payoff
Supporting anywhere, anytime payments allows borrowers to put their tax refunds towards a new or existing automotive loan without hassle. In addition, omni-channel payment technology means you never have to turn away a payment, and borrowers can use their preferred method.
Integration to your DMS is seamless when you use a one-stop-shop payment processor like REPAY. But don’t wait until tax season to get started!