Challenge

Tekion was founded in 2016 with the mission to revolutionize the automotive retail industry through its cloud-native platform. The company had a long-term vision to develop a single, cloud-native platform to unify the siloed technology systems that dealers typically used for different business tasks. Tekion quickly added features such as digital sales and service experiences to increase efficiency for dealerships, improve the customer experience, and unlock new capabilities.

By 2021, Tekion decided the next step in its evolution should be to integrate payments into its platform, so that dealers could accept payments for repair orders, vehicle purchases, and parts orders—whether online or in person. That goal sent Tekion looking for a payment partner.

Tekion’s commitment to significantly simplify dealership management meant that it would need a flexible embedded payment solution. The solution would have to be easy to integrate and customize for a white-labeled user experience that allowed dealerships to interact with Tekion’s products as a single, integrated platform. Tekion had plans to expand into other countries such as the UK, so it also needed a partner with a global presence that could handle regional compliance issues.

Because automotive dealerships serve a wide range of customers, it was important that Tekion offer a range of popular payment methods to increase conversion. Any solution also needed to include point-of-sale hardware and software since many dealership transactions occur on premises.

Finally, to support its plans to continually innovate and expand the platform’s suite of financial products, Tekion wanted an equally innovative partner with a wide range of products designed to work together. “We needed a holistic solution, and we needed one that would scale with our business needs,” said Jamie Fox, senior director and general manager of Tekion Pay.

Solution

Tekion signed with Stripe in 2021 based on Stripe’s reputation for ease of integration and its full suite of well-designed products that could support long-term expansion. “Stripe was the best choice for us, not just for its payment products, but because we knew we could continue to scale with it,” said Fox.

Tekion opted to integrate Stripe Connect, which offered the flexibility it needed to build Tekion Pay as a white-labeled product that can be run entirely within the Tekion platform and not require users to sign into Stripe. Because Connect meets local payment requirements in more than 46 countries, that single integration would support Tekion’s expansion plans and ensure compliance with local regulations in multiple markets.

Connect’s integration with Stripe’s Optimized Checkout Suite gave Tekion access to a set of tools designed to increase conversion, including a set of embeddable UI components through Stripe Elements. The Payment Element allowed Tekion Pay to support a wide range of payment methods for processing transactions, including ACH; Apple Pay; Google Pay; and the buy now, pay later (BNPL) option Affirm, which gives customers added flexibility in paying for major purchases. And with Link, Stripe’s accelerated checkout solution, Tekion’s dealer partners could offer customers a quicker experience by autofilling customer payment details. Tekion also adopted Payment Links, which allowed Tekion Pay users to send unique payment pages to customers through text or email, giving end customers more options and even facilitating contactless experiences.

To unify online and in-person payments, Tekion integrated Stripe Terminal. Dealerships could order Terminal card readers from inside the Tekion platform, and the hardware would ship directly from Stripe, which meant Tekion didn’t need to hold any inventory.

And because all of these products run through Connect, Tekion was able to create a seamless and feature-rich experience for its users. “Connect is our core piece,” said Fox. “It drives everything for us.”

Tekion also partnered with Stripe professional services to guide its implementation with added expertise and best practices. The team helped Tekion work through its requirements to design the ideal solution with Stripe. This included creating a smooth flow of funds across Connect, Stripe Issuing, and Stripe Treasury—and ensuring dealership payouts met the company’s specific timing requirements.

Stripe professional services helped Tekion navigate authorization and capture adjustments, different card flows, and business operation changes. With continuous guidance and expertise, the team kept Tekion unblocked to maintain momentum for a successful launch.

Results

Tekion Pay beta product launched in 90 days

Stripe’s simple, straightforward API framework and the flexibility of Connect allowed Tekion to develop Tekion Pay’s core functionality within a matter of weeks. The team then completed integrations with the rest of the platform to launch a beta version of Tekion Pay within 90 days of signing with Stripe.

“It’s truly a remarkable time frame for us to integrate the product into every single place where customers can interact with it,” said Fox. “The ability to implement quickly sped up our beta launch, which contributed to our ability to bring a production solution to all customers faster than expected.”

Connect simplified expansion across North America and the UK

Tekion now operates in the US, Canada, Puerto Rico, and the UK. The global scale of Connect and the Stripe API allowed for a standardized, seamless expansion across regions, said Fox.

90% of Tekion’s customers have adopted Tekion Pay

Among Tekion’s current dealer partners, 90% have adopted Tekion Pay to process transactions. “That level of penetration is unheard of in merchant services, and creates increased platform value for our dealers and their customers, giving them more omnichannel payment acceptance and increased back-office efficiency—as well as minimizing context switching between platforms,” said Fox.

Up to a 23% reduction in aged accounts receivable balances

Dealerships using Tekion Pay are getting paid quicker and reducing their accounts receivable balances by up to 23%. With more ways for customers to pay, dealerships are now finding it easier to collect on invoices. And Stripe-powered features of Tekion’s platform are now allowing end customers to sign documents electronically and make down payments immediately.

40%–60% cart size increase in transactions that use Affirm

Transactions on Tekion that go through Affirm now have the potential to generate 40%–60% increases in average cart size. To help dealers give their customers even more ways to pay, Tekion plans to roll out additional BNPLs—such as Klarna and Zip—through its Stripe Payments integration.

Tekion’s dealerships completed go live with 7,000 Terminal card readers

Tekion has brought the benefits of digital transformation to the automotive retail industry by implementing a total of about 7,000 Terminal card readers among dealerships that use Tekion Pay. Notably, among dealerships using Tekion Pay, about 65% of transactions occur in person.

New, Stripe-powered embedded finance suite in development

Tekion is moving beyond payments with Stripe Capital, Issuing, and Treasury, which integrate directly with Connect. Tekion is using these products to help dealerships manage cash flow constraints, expenses, and spend. Since its dealerships already have trust in Tekion’s operations management, moving into financial services will add significant value for users; at the same time, it will open new revenue streams for Tekion.

“We’re designing a financial services suite that should make it so that a dealer doesn’t have to open an external bank account if they don’t want to,” said Fox.