The way consumers pay for products has evolved, and that change has trickled down to the automotive retail industry. As a result, dealerships may need to assess their payment methods to ensure they are offering the right ones for today’s car buyers.
On this subject, Podium surveyed 1,041 consumers across the United States and Australia for an ebook on preferred payment methods. The goal was to understand which payment methods local businesses should utilize, and how.
“With the current digital transformation and pressures of a pandemic, payments have changed from ‘how you get paid’ to playing a critical role in your customer experience,” said Podium in its report.
The report found that 25% of customers will abandon a transaction if their preferred payment methods are not offered, while three out of four consumers feel changes made to their preferred payment methods due to the pandemic are likely to remain. Furthermore, consumers increasingly want digital payment options, including things like website payments, mobile wallets (such as Apple Pay or Google Pay), direct pay platforms (such as Venmo or PayPal), and text links.
Podium notes that “customers are increasingly demanding that businesses provide payment options that enhance their overall experience and allow them to continue the conversation beyond the point of sale.”
Based on data from the report, the top two factors that consumers take into consideration when buying a local business or service provider are: customer service (60%) and convenient payment options (41%). Only 14% selected loyalty programs as their top factor, and only 10% discounts.
Specific to U.S. consumers buying from local businesses, 43% are more comfortable swiping their credit card than using cash, and 53% prefer swiping their credit card to reading it out over the phone.
Payment methods also differ by group, such as age/generation (millennials, Gen X and Gen Z consumers), high frequency shoppers, and high-income consumers.
According to Podium, “Consumers under aged 55 have an 89% higher affinity for digital receipts than consumers aged 55 and above.” They are also three times more likely than consumers aged 55 and over to abandon a transaction with a local business because their preferred payment method was not available.
Overall, 73.8% of consumers want local businesses to continue to offer contactless payment options, and 58% of high-income consumers are likely to avoid businesses that do not offer these methods.
“It’s clear that new payment methods are here, and customers are experimenting with them. Local businesses have to adapt quickly to their customers’ ever-changing preferences and anticipate their expectations,” said Podium in its report. If they don’t, they run the risk of becoming irrelevant.”
And in terms of payment methods, that means losing revenue.