How to integrate open banking for car dealerships with Fire’s API

A step-by-step guide to streamlining payments with open banking API providers in the automotive industry.

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Car dealerships operate in a fast-paced environment where handling high-value transactions efficiently is crucial. However, traditional payment methods often come with challenges – cumbersome bank transfers, credit card limits, and high card processing fees that increase costs and create administrative burdens.

Open banking offers a modern solution, enabling dealerships to streamline payments and provide customers with a secure, cost-effective alternative. Integrated open banking providers like Fire facilitate direct account-to-account payments, reducing reliance on costly card transactions while enhancing the overall payment experience.

In this blog post, we will explore how car dealerships can integrate open banking to streamline payments, reduce costs, and improve the customer experience.

Choosing the right open banking API provider for car dealerships

Open banking for car dealerships offers a significant opportunity to streamline payment processing while reducing costs and offering customers a secure and trusted payment method. Fire, a leading open banking API provider, offers seamless payment acceptance via real-time API integration, which can be easily incorporated into businesses’ internal systems, such as your Dealer Management System (DMS).

With recent market shifts, such as Vyne’s exit from the UK market, car dealerships have the opportunity to select an open banking API provider that meets all of their needs. Fire is regulated in both the EU and the UK to provide a range of payment services, making it a trusted partner for car dealerships’ payment processing, ensuring resilience that goes beyond open banking.

Why car dealerships are turning to open banking to meet their payment needs

Car dealerships can gain numerous advantages by adopting open banking, from improving payment efficiency to lowering costs and providing customers with a secure and reliable payment option. Below, we outline the key benefits that make open banking an attractive solution for dealerships.

Lower transaction fees

Payment fees in the automotive industry typically range from 3% to 4% of the transaction value, which can significantly impact revenue. In fact, many dealerships avoid accepting card payments for high-value transactions due to these costs. In contrast, open banking API providers offer lower rates, making it a more viable option for processing large payments.

Additionally, open banking for car dealerships ensures greater price transparency by reducing the number of intermediaries and third parties involved, helping to eliminate hidden costs.

Expedited payment settlement

Payments are processed in real-time through existing account-to-account rails, eliminating settlement delays and improving cash flow.

Simplified reconciliation

Open banking payment acceptance providers like Fire also offer collections accounts – also known as settlement accounts – streamlining reconciliation and enabling your car dealership to access funds immediately upon settlement. The Fire Payments API further enhances this process by allowing you to include additional fields such as Customer ID and Order ID. This ensures you have all the necessary data for efficient reconciliation and quick order fulfilment. Additionally, it eliminates manual errors from users inputting incorrect IBANs or reference details, which is a common issue with traditional bank transfers.

Enhanced security

Open banking payments are authenticated through the customer’s chosen account provider, eliminating the need to enter and store card details. This provides customers with peace of mind while relieving car dealerships of the responsibility to store and manage sensitive card information. It also reduces potential liability and costs associated with Payment Card Industry Data Security Standard (PCI DSS) compliance, although this responsibility is often fully outsourced to the acquirer.

Seamless integration with Dealer Management Systems (DMS)

The Fire Payments API is designed for seamless integration with your existing DMS, enabling automated reconciliation and a more efficient workflow tailored to your specific requirements.

Integrating Fire’s open banking API: A guide for car dealerships

Integrating with the Fire Payments API is straightforward. Our comprehensive documentation and dedicated support team make the process easy to follow, whether you’re a car dealership integrating directly or a Dealer Management System (DMS) provider.

Our step-by-step guide

Step 1: Get access to Fire’s open banking API
Register with Fire and set up an API application to receive your credentials.

Step 2: Test the Fire API endpoints and webhook responses
Follow Fire’s API guide to integrate open banking payment requests with your own systems. It is advisable to test the API response and webhook messages to ensure seamless integration and compatibility with your own workflows.

Step 3: Create open banking payment requests
Automatically create payment requests on demand, specifying details such as:

• Currency: The currency of the transaction.
• Sub-account: The designated Fire sub-account where the payment will be deposited (useful for managing funds across different branches or departments).
• Description: A brief description of the transaction (visible to the customer).
• Return URL: The URL to which the customer will be redirected after completing the payment process.
• Custom Data (Optional): Include relevant information like Order ID or Customer Number to automate and streamline reconciliation.

Step 4: Automate reconciliation
Receive instant notifications as the payment is authorised and settled to your account, and call the Fire API to retrieve real-time payment status updates, enabling smooth operations and automated reconciliation with your accounting systems.

Step 5: Deploy & go live
Once development and testing are complete, deploy and start accepting payments through open banking.

Additional services Fire offers to car dealerships

Fire offers a range of payment services, all accessible through one point of access through our apps or one API integration.

Multi-account management

Open and manage multiple accounts for different branches, locations, or expense types, simplifying reconciliation and fund segregation.

Fire enables car dealerships to create multiple sub-accounts on demand, tailored to your business needs. For example, you can set up a sub-account for each branch or location, or create accounts for specific purposes such as managing different expenditure types or receiving payments.

Business debit cards for dealership expenses

Car dealerships use Fire debit cards to control expenses across multiple branches and employees with centralised management and minimal administrative burden.

Dealerships can have as many card-only users as they need, linking the cards to the relevant account whether it be depending on location or expenditure type, and block or unblock cards as needed to maintain a high level of control and oversight of expenditure.

Automate payouts and refunds

Offer instant refunds and payouts via the Fire Payments API, improving customer satisfaction and reducing administrative overhead.

FX services

Benefit from competitive real-time currency conversion, perfect for dealerships operating across Ireland and the UK. Fire provides euro and sterling accounts as standard, along with the ability to convert funds in real-time at the interbank rate.

The future of payments in the car dealership industry

Open banking adoption is accelerating as dealerships seek cost-effective and customer-centric payment solutions. Support from regulators in the UK and Ireland is driving greater adoption of open banking payments, while integration with emerging technologies like electric vehicle (EV) subscription payments and top ups, powered by commercial Variable Recurring Payments (cVRPs), further solidifies open banking’s role in the automotive industry.

Unlock seamless payment processing for your car dealership

Open banking payments offer car dealerships a faster, more secure, and cost-effective payment solution. Fire’s open banking API ensures seamless payment acceptance, automated reconciliation, improved cash flow, reduced operational inefficiencies, and an enhanced customer experience.

Gain access to an integrated solution that streamlines your payment processing across the UK and EU through a single, dual-regulated provider.

Contact our team today for a demo or consultation and explore how Fire can help you optimise your payment processing.