How Automotive Payment Preferences are Shifting: New PayJunction Data Reveals Surcharge Impact

PayJunction has released new research indicating that car dealership customers are more likely to switch payment methods than abandon a business when faced with credit card surcharges. For fintech providers in the automotive space, this highlights a critical shift toward payment flexibility as a primary driver for customer retention and cost management.

What was announced

PayJunction’s research, based on a survey of 500 current U.S. car owners who visited a dealership in the past year, reveals that 71% of respondents believe a credit card surcharge would not influence their choice of dealership. This figure includes 30% who strongly agree and 41% who somewhat agree with the sentiment. Instead of taking their business elsewhere, consumers are opting to change how they settle their bills. Specifically, 51% of those surveyed would consider switching to cash, debit, or check for routine maintenance if a surcharge were applied, while 49% would do the same for repair services. Despite the friction of surcharges, credit cards remain a dominant preference for significant expenses. Approximately 82% of participants would still consider using a credit card for large, unexpected repairs, primarily driven by the desire to earn rewards or cashback (60%) and the need for more time to pay off the balance (53%). Routine maintenance (73%) and repairs (67%) were the services most frequently identified as purchases respondents would put on a card, even with a surcharge of up to 3%. The study also highlights the growing role of alternative financing. Nearly half of the respondents (49%) expressed interest in using Buy Now, Pay Later (BNPL) services for major repairs. This interest is particularly pronounced among younger demographics, with 60% of millennials and 54% of Gen Z respondents favoring installment options. The primary motivations for choosing BNPL include the ability to spread out payments (63%) and the preservation of cash reserves (57%).

"Our research shows that customers aren’t asking dealerships to eliminate surcharges. They’re asking for a choice,"

Randy Modos, Co-Founder and President at PayJunction.

The companies involved

PayJunction is a technology-focused payment processor based in Santa Barbara, California. The company specializes in providing mid-to-large-scale businesses with tools to streamline payment acceptance across multiple channels, including in-person, online, and mobile environments. Since its inception, PayJunction has positioned itself as a developer of proprietary payment technology, moving away from the traditional reseller model to offer a consolidated platform that handles transaction processing, equipment, and security. In the competitive merchant services market, the company distinguishes itself by focusing on transparency and eliminating the complex fee structures often associated with legacy processors. Its suite of services is designed to integrate with existing business workflows, particularly in sectors with high average transaction values like the automotive industry. By developing its own software and hardware solutions, PayJunction maintains direct control over the user experience and data security, allowing it to implement features such as digital signature capture and cloud-based reporting. This vertical integration has allowed the firm to carve out a significant niche among dealerships and service centers looking to modernize their financial operations while managing the rising costs of interchange fees and credit card acceptance.

What FF News has reported before

FF News has followed PayJunction’s technological expansion closely over the past year. In July 2025, the company made headlines when PayJunction Launches AI-Driven Voice Payments Powered by Twilio, a move aimed at automating phone-based transactions. This followed an April announcement where PayJunction Announces Integration with Zapier to Help Businesses Create Custom Payment Workflow Automations, allowing merchants to connect their payment data with thousands of other web applications. The company’s leadership team also saw growth when PayJunction Appoints Scott Herriman as Vice President of Engineering in late 2024 to oversee its technical roadmap. Additionally, the firm has focused on mobile-first consumer preferences, as seen when PayJunction Expands Payment Capabilities with Text to Pay, providing a contactless option for remote billing and service pickups.

What this means

This data suggests a significant shift in the power dynamic between merchants and consumers regarding payment fees. Dealerships previously feared that passing on credit card costs would alienate customers, but surcharging is clearly becoming a normalized friction point. This puts pressure on traditional merchant acquirers to provide technology supporting multi-modal payments, including ACH and BNPL, or risk losing volume to agile fintechs. The industry must now consider whether this consumer tolerance for surcharges will extend beyond high-ticket automotive repairs into broader retail, potentially triggering a wider retreat from credit card dominance in favor of lower-cost digital alternatives.