Auto dealers must pay processing fees on credit card purchases, just like any other retailer. Although dealers frequently pass those expenses on to the buyers, regulatory perimeters and customer transparency may present some roadblocks in the car buying process. On today’s episode of Inside Automotive, Ujj Nath, the Chief Executive Officer of myKaarma, a market-leading operating system for communications and payments, talks about how to better collect credit card processing fees.
One of the few platforms for end-to-end solutions that is entirely compliant with state, federal, and card brand regulations is myKaarma, which processes 6 billion transactions annually. When it comes to surcharges, they are seamlessly integrated into all operations.
However, Nath cautions, “you must utilize the proper notice and disclaimers when billing customers. The percentage of the fee that is being charged must be visible and clearly stated on the table tops. Since the consumer won’t be made aware of the surcharge or processing fee your business imposed until days later. Additionally, one of the rules the government has established is that you can’t profit from surcharges.
For example, “it breaks the compliance if you, the consumer, visit a myKaarma dealer and we allow you to pay with your American Express. Our processing charge for American Express is 2.9% yet, we charge you 3%.” The issue then becomes, the settlement rate isn’t known for at least two days after. This happens because most merchant processing is acquired from these independent software vendors (ISV) that take time to process.
To remain in compliance with such rules, myKaarma provides customers the opportunity to process through all card brands and processing fees in real time. Additionally, to ensure complete transparency, your knowledge of what is happening, customer compliance, and by handling everything, myKaarma has the greatest legal team to ensure that it is aligned with every regulation.
Heading toward the future, Nath forecasts the entire payment industry will shift. Nath shares, “gone are the days of huge terminals, soon we will be able to scan our retina as a form of payment.” Therefore, it is critical that myKaarma gets to the forefront of all innovative technology for dealers.
“You don’t need to worry about any charges made via wireless, chip, e-reader, swipe, or even online if you’re a dealer,” adds Nath. He also encourages any interested dealer to visit myKaarm.com and arrange a demo.
*This article first appeared in CBT News here.