Why should dealerships consider adding another means of payment to their business?
Evaluating the current environment surrounding payment processing in 2020, the waiting period for processing can be annoyingly prolonged by traditional banking systems. Customers are looking for a simple and easy experience when shopping. It would be great if dealerships could also share this experience when selling!
There are multiple methods dealerships have available for accepting payments. For example, the traditional methods include direct transfer from the bank, paying cash, or setting up monthly installments to finance a new vehicle.
Selling cars is not always a straightforward process. There are ways to work around obstacles that may arise and ensure that your dealership is maximising all possible opportunities to make a sale! We are going to explore various methods of payments that have been working excellently for businesses and then dive into investigating why cryptocurrency may be a great opportunity for dealerships to profit.
Based on the printing of new banknotes, money is being updated and created with different materials which increase the longevity of the note. Cash is still widely used within the UK, with the pound sterling being the world’s oldest currency still being used today. According to the bank of England, research suggests that people still use money as they find it easy, convenient, provides anonymity, and makes money management easier for some. On the other hand, dealerships experience struggles faced when a customer is ready to pay, and they are unable to pay more than the allowed sum of £10,000 according to HMRC.
Unfortunately, due to the law and legislation created to tackle money laundering (AML) issues, this can sometimes result in losing customers or a delayed process splitting payments between bank transfer and cash. Money laundering issues has caused the government to create new laws and legislation to monitor business finances. As a result, cash is still highly valued by the British population however, as a form of payment within a dealership, there are many guidelines to follow just to make sure that laws are not being broken.
The cashless society phenomenon does not support the current trends of today and the convenience as consumers are less tolerant of waiting for service.
In this current environment, bank transfers have transformed the way people are able to purchase items. Unfortunately, taking payment on high ticket priced items through bank transfer can take up to 3-5 working days for dealerships to finally receive the money and this is if the bank does not block the payment due to being a high amount to a new payee. The duration of how long it takes for dealerships to receive money is a great disadvantage of using traditional banking as it is part of a controlled society.
The fees applied to high-value payments can be agonizing as banks charge for services.
Debit cards /credit cards
The ability to agree to set up a direct debit with a company and stretch payments is great. However, there are issues to highlight surrounding the traditional banking system and their processing time. For instance, the duration it takes for payments to be processed by banks is too slow. The customer will have their vehicle however, the dealership will not have their funds until 3-5 working days after the sale. This is a major disadvantage is the time taken by the bank is time lost for the dealership which could have been made purchasing the next product to sell. The internal time is costing!
“Time is money.’’ – Benjamin Franklin
It is important to not ignore what is emerging in the currency world. There has been a rise of cryptocurrency users, as 1.9 million British users valuing cryptocurrency. However, they have only a few places to spend their money. This is where the opportunity for business begins!
There is a link between the typical cryptocurrency holder and the target audience of people interested in buying a vehicle. Therefore, it is evident that there is a gap in the market, and it would be in the best interest of dealerships to start accepting cryptocurrency as a means of payment! What have they got to lose?
“By failing to prepare, you are preparing to fail.’’ – Benjamin Franklin
As a result, after analysing the issues found with traditional banking systems, cryptocurrency appear to be solving many problems.
Solutions cryptocurrency solves:
- The processing time is instant! Transferring funds from the buyer’s wallet to the seller’s wallet will take seconds compared to the 3-5 working day period dealerships and other businesses must wait to finally receive their funds. No banks or government is involved in processing cryptocurrency payments, hence why the process is easier, faster, and simpler for all parties involved.
- Privacy and anonymity are provided for users.
- There is more control of your own finances regarding who is buying and selling…
- The removal of traditional banking allows all parties involved to have more power with their finances.
According to Forbes, there would need to be a catastrophe for Bitcoin not to rise at the end of 2020. It is estimated to double by $20,000. In addition, the market is being watched and analysed and it was released that Bloomberg’s senior commodity strategist Mike McGlone, stated the price of bitcoin is expected to continue to grow “in the unlikely event of a significant change for the worst’’. Current cryptocurrency users, they will be profiting largely from the peak taking place at the end of 2020. Therefore, creating a method of payment where they can exchange their digital assets for a physical product would be a great profitable business opportunity for car dealerships.
Cryptocurrency and dealerships
Eventually, cryptocurrency users are going to want to cash out after the peak. In this present day, Auto Coin Cars is an example of the few businesses that offer an exchange for a physical product within the UK. Autocoincars just like many other businesses who accept cryptocurrency payments claims that transactions can be made instantly as the middleman has been removed. Not to mention, there are no additional transaction fees when a customer uses cryptocurrency. Most users find that they have more power with their money and are provided confidentiality which is not available when using traditional banking systems within the controlled society.
Hence, adding this fast, easy, and secure payment process will eliminate some of the many issues that using traditional means of payment. Removing traditional forms of payment is not the advice, but just to add cryptocurrency as an option for those cryptocurrency users