How Angelo Mendola Is Rethinking Dealership Payment Processing

Angelo Mendola, President and COO of Priority Payments Local, explains how dealerships can improve profitability by optimizing payment processing, technology and financial workflows.

On the latest episode of Inside Automotive, Mendola examines the operational costs hidden within dealership payment systems and technology stacks. He discusses how redundant vendors can increase expenses and reduce efficiency, while consolidation can simplify operations and free up staff resources. The conversation also explores surcharging and dual pricing, including the compliance considerations dealers must address when shifting payment costs to customers.

Key discussion points include:

• Reducing technology overlap and the costs of “multi-layer syndrome”
• Surcharging vs. dual pricing and how each approach works
• Payment compliance across pricing, receipts, taxes and accounting
• Modern payment options, including mobile wallets, text-to-pay and BNPL
• Streamlining dealership workflows to improve efficiency and EBITDA
• Faster technology implementation during acquisitions and operational transitions

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Transcript

Welcome And The Real Payment Problem

Announcer 0:06

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:12

Payment processing can be one of those parts of the dealership business that gets complicated quickly. Today we're taking a closer look at some of those challenges and what dealers can do to simplify the payment process. Joining us is Angelo Mendola, who is the president and chief operating officer at Priority Payments Local. Thank you so much, Angelo, for joining us on the show today. Thanks for having me, Jim. Sure. So uh let's kind of jump in here. Um, you know, there are some key points for dealerships on this very topic. Talk to us, talk to us about that. I know you've got a lot of experience in this area.

Profit Hides In Money Movement

SPEAKER_02 0:47

Yeah, uh, too much sometimes. You know, really when we talk about payments, the way we speak about it with dealers is about profitability. The the conversation usually goes immediately as selling more cars or increasing repair orders or driving more traffic. Yep. Those things matter, but there's another side of the equation. Dealers process an enormous amount of money every single day. Yeah. And there are real opportunities to improve profitability by looking at how that money moves and how many systems actually touch the transaction and what those systems cost. Yeah. The manual work is important as well because it's what's required after the customer pays. You could create meaningful EBITDA without necessarily selling another vehicle. And you know, the issues are you know, dealers have uh a list of technology, and sometimes it's too much, right? They have a DMS, they have a CRM, they have their payment provider, maybe they have a texting solution vendor, digital retail platform, service scheduling, customer communication tools like texting and SMS, accounting plugins, payment links, uh, maybe even a separate gateway and reporting allocations for power posting. And all of those systems make sense individually, but the problem is that the dealership ultimately has to make them all work together. Yeah, and that's what we find.

Jim Fitzpatrick 2:04

That's right.

Dual Pricing Versus Surcharging Basics

Jim Fitzpatrick 2:05

That's right. Talk to us about simplifying the kind of the dual pricing and surcharging that dealers are challenged with.

SPEAKER_02 2:12

Yeah, I mean, the problem is processing costs have become a meaningful operational expense, uh, and they're rising. They rise every year. The card brands and the issuers are constantly messing with interchange, uh, reclassifying cards. Uh, the recent release of the CEDP uh changed the way level two and level three transactions processed, so cost has gone up. Uh, so a lot of dealers are asking us, can I eliminate well? Let's backtrack for a second. A couple years ago, surcharging became a thing, right? It wasn't just a gas station idea, it wasn't just a municipality idea, it was making its way into retail and then eventually automotive. Yeah. So surcharging is essentially saying if you use this payment method, there's an additional cost associated with it. What we've been asked is, can I eliminate more of that expense without creating a bad customer experience? And that's where it gets tricky, Jim. So dual pricing approaches the conversation a little bit differently. Uh, there's a cash and alternative payment price, and then a car price. The customer chooses how they want to pay. So the technology isn't the hard part. Uh, it doesn't exist everywhere, but we have it. Uh, the hard part is making sure pricing, and this is important, Jim, not just the pricing, but the tax, the disclosures, and how you present it to the customer for payment processing all agree with each other. So the math is easy, the operational execution is where dealers can get into trouble.

Jim Fitzpatrick 3:36

Ah,

Compliance Starts With How You Present

Jim Fitzpatrick 3:37

gotcha, gotcha. So, so that's perfect segue to my next topic here, which is navigating payment compliance. I mean, that that's you know, dealers are can get in trouble quickly in this area, right?

SPEAKER_02 3:49

Yeah, I mean, dealers shouldn't assume that because a terminal can perform a function, the dealership is necessarily using it correctly. Yeah. So one of those misconceptions I see, and which helped us build our product and and helped us learn a lot is a simple feature inside the it isn't just a simple feature inside the terminal. Compliance involves how the price is presented, right? So how the customer is informed of the that pricing and what tender is being used, and then what appears on the invoice, what appears on the receipt, and ultimately how that transaction is then accounted for. Right. So it has to follow the transaction from the first price the customer sees to the final accounting entry.

Too Much Tech Or Duplicated Vendors

Jim Fitzpatrick 4:31

Let me ask you this is too much technology too much? I mean, at the end of the day, dealers are I don't want to say burdened with it, but uh but they're a little overwhelmed. You know, you talk to dealers about some of these technologies that are out there and their eyes go go glassy on you.

SPEAKER_02 4:48

Well, think about it. You have one system that sends tax, another one sends payment links, another one has the customer portal, another one does scheduling. So I don't think dealers have too much technology. I think some dealers have too much duplicated tech.

Jim Fitzpatrick 5:01

Yeah.

SPEAKER_02 5:02

They have a lot of the they have a lot of vendors overlapping, and that's a bad thing.

Jim Fitzpatrick 5:06

Yeah, you're right, you're right. And and and then in many cases, they don't know which ones that they can do away with and which ones they should stay with, right?

SPEAKER_02 5:14

Right. I mean, I think the right answer is maybe four or five different tech vendors. At some point, you have to ask whether we're improving the process or simply stacking tech on top of tech.

Jim Fitzpatrick 5:24

Right, exactly. Exactly.

Let Customers Pay Their Way

Jim Fitzpatrick 5:26

Can customers pay the way that that they want to pay under this program? I mean, that at the end of the day, you know, when you talk to customers and surveys and CSI scores and everything else, this is a factor, right?

SPEAKER_02 5:39

Yeah, I mean, of course, customers have a certain way that they like to pay. It's mostly credit debit. You need to offer ACH payments, you gotta still offer cash, uh, you gotta be able to take checks. Text to pay is very important, email to pay is very important, remote payments. You know, your customers aren't always there. Uh, and maybe it's not the customer picking up the vehicle is the one who's actually paying. So you need to be able to have that remote payment. Mobile wallets are are gaining so much traction. I know we use them every day, but in automotive, it took a little while and now it's there. It's you need to be able to accept those mobile payments. And then you have your financing, right? You're you're buying out pay later that people like to use on a lot of transactions. The option to break this payment up into multiple payments over the next couple weeks.

Jim Fitzpatrick 6:22

Yeah, right, right, exactly. And you guys handle all of that.

SPEAKER_02 6:26

Yeah, I mean, we don't want the payment choice the customers choose or need to use to have the dealership sacrifice any economics or accounting control. They should be able to take every type of payment, and our products absolutely do that.

Dealer Pain Points And Transaction Walkthroughs

Jim Fitzpatrick 6:39

Yeah, yeah. When you go into a new dealership, uh, Angelo, or a new group, and uh you talk to them about this. What are some of their pain points that they're telling you that they want solutions to? And I know we just mentioned a few of them.

SPEAKER_02 6:51

Well, we know our car dealers, right? Price is a big factor, so they want to save money. Sure. And I think where where we really get into the nitty-gritty and talk real business is about this multiple multiple vendor syndrome that they have, right? I have, you know, 10 or 12 different tech vendors that they're paying subscription fees, and sometimes those subscription fees are astronomical, but then they have another vendor who's doing some of that stuff or all of it, but they hired them to do one thing, and that's where we start to dissect and we have a real business consultation to say, well, take us through a transaction. I want to see someone who comes and views the car in the showroom, how they get to FI, what kind of systems they're using to do that, and then take me to fixed ops and show me how that works too. And sometimes they know right off the top of their head, they know they have a problem, they know that they're buried, but they don't have the time to figure out ways to combine these things, and that's where we help.

Jim Fitzpatrick 7:42

Yeah, yeah, for sure. You call it multi-layer syndrome, right?

SPEAKER_02 7:46

Yeah, multi-layer syndrome, right?

Jim Fitzpatrick 7:49

That's awesome. So, for dealers that are watching us have this conversation today, they're saying, you know, I'm not that deep into this. Obviously, that's a it's a maybe in a comp troller would be much closer to this issue. However, they're liking what they hear today. Any any dealer wants to save money wherever they can, especially today when we see margin compression on the front end and uh used car ish issues and and obviously fixed ops. Um they're all about saving a little bit of money, especially if you've got 10 stores, 20 stores, 30 stores in your operation, right? When they when they give you a call, what uh do you go in and do an audit of where they currently are?

SPEAKER_02 8:26

Yeah, I mean, we we we ask probably about 20, 30 questions in a you know, casual conversation. We like to speak to CFOs and operators. Yeah. Well, controllers usually tell us the most. Uh they're the ones who are reconciling that month end and really watching transactions from start to finish. Uh, our GMs are great proponents of telling us what they need at the store level. So we go through those different departments to understand, you know, it costs is going to affect everyone, right? From ownership to the employees. And at the end of the day, that's the easy part. Math is always easy. Yeah, it's about how we get there. So we want to understand DMS, obviously. We want to understand the CRMs they're using, how they're communicating, and then we we dive in, you know, we dive in with solutions, not specifically products, because you know, AutoLink's our our learning product, right? We we've created AutoLink to solve all of these problems, and every day we're adding new features. You know, we're in phase nine of it. You know, we've had nine solid phases of the evolution of AutoLink, and you know, we're ready to add more, you know.

Jim Fitzpatrick 9:27

Yeah, yeah.

Onboarding Speed And Multi Store Rollouts

Jim Fitzpatrick 9:28

So what what what amount of time does it take you to onboard a new client at for their dealership?

SPEAKER_02 9:34

You know, speed is success in this business. Yeah, um, a lot of dealers are in you know buy-sell mode, so when they need us, we have to be able to usually tell us a couple days before that new store is opening. So we're able to get deals done. Uh, you know, have a Friday intake with us, and you know, over the weekend we'll have our team uh out on planes and equipment uh drop shipped. Wow. You can start plugging in Monday. You know, we've done that actually, we're doing one this week right now. So Friday was an intake call. Our guys are in the office through Saturday, they packed up their bags and they're live installing on location in St. Louis today.

Jim Fitzpatrick 10:08

Wow. That's impressive. Obviously, they don't all need to be rushed like that, right? I mean, the best case scenario is that you've got a few weeks or 30 days, right, from the time that you get the call.

SPEAKER_02 10:19

Yeah, yeah. Because you always find out the when when you rush, you're gonna find out that you missed a couple steps along the way. But we can get it done. But you're right, uh, Jim, we we like to have a nice week in advance intake, uh, check with different stakeholders as we go, then we'll check with the IT department, make sure we're getting there on that specific day that firewalls aren't up and all the plugs were where they need to be. Yeah. Uh staff members that need to be trained. So we like to organize that. But realistically, you know, we're a five-day process.

Jim Fitzpatrick 10:48

Yeah. Wow, that's nice. And what if a dealer uh group has got multiple locations across state lines? They've got them in four different states.

SPEAKER_02 10:57

I mean, ideally, we'd like to deploy multiple teams and we can install simultaneously. Uh, depending on the appetite of the dealer group, sometimes they'd like to stagger them even further out because of uh leadership or different staff that needs to be at certain locations for that. But uh we can handle it either way. I mean, we're we're operating at the speed of trust, so we like our dealers to kind of tell us how they want things done, and along the way, we'll give them a little advice and try to help them kind of speed it up if we need to.

Jim Fitzpatrick 11:25

Okay.

State Rules And Where To Start

Jim Fitzpatrick 11:26

And then on the compliance side, there's I would assume that there's different state regulations and laws that you've got to be obviously well versed in and cover the dealer's liability there as you as you implement the program across state lines, right?

SPEAKER_02 11:41

Yeah, I mean, surcharge laws that exist at the state level, uh, they differ. Uh, some are very copy and paste, and then some have their own. There's a few states still left that have a no surcharge clause. That's where dual pricing comes in. Uh, we also buy department in in some of the showrooms, we don't do dual pricing. It's very hard to achieve depending on the DMS. Uh we do offer it. Uh the the best thing that I can say is dual pricing's for everybody. Surcharge is where you should start if your state allows it.

Jim Fitzpatrick 12:08

Okay, gotcha.

Savings Math And Closing Takeaways

Jim Fitzpatrick 12:09

Angelo Mandola, who's the president and chief operating officer at Priority Payments Local. Uh, dealers, if you're looking to save some money, have a better customer experience, have a better CSI, um, this is an area that you probably want to focus on for the balance of 2026. So uh uh we're gonna show all the information here on the screen as to how to get a hold of Angelo and his team. Um, this you could you could pick up uh on average, I won't hold you to this, Angelo, but on average, for the average size dealership, what are we talking about in terms of uh efficiency or savings on a rooftop?

SPEAKER_02 12:44

I mean, on a dual pricing program, you're gonna save 100% of your processing fees, but you're gonna get back to control that maybe you were losing from your staff, right? Bandwidth is so important. Yeah, it's it it's it's not measured by dollars until you actually start seeing it work. Yeah. But you know, here's what I'll say you know, the customer should see simplicity, the dealer should see control. Yeah. And saving 100% of your processing fees, you know, you're creating anywhere from two to three and a half percent in new EBITDA realized value, into prol's value for your dealership.

Jim Fitzpatrick 13:16

That's right. That's right. That's that's real money right there. For sure. Right. And to your point, no more vehicles were sold, no more ROs were written, right? So, yeah, no brainer. No brainer. Give Angelo a call, guys. These are the kind of solutions we want to be bringing you here at CBT News. Angelo, thank you very much for joining us on the show. Very much appreciate it, Jim.

SPEAKER_02 13:36

Thank you so much for having me. Looking forward to chatting with you again. Thanks.

Announcer 13:41

Thanks for watching Inside Automotive with Jim Fitzpatrick.