How Carwow’s online car auctions embedded Airwallex infrastructure

Introducing Carwow

In 2021, Carwow launched a new service, enabling private sellers to sell their cars directly to dealers through daily online auctions. These online auctions help private sellers get a great price for their car and give dealers access to a rich source of quality used cars. Since launch, over 200,000 cars have changed hands through the platform, worth a combined £2.7bn. 

The Challenge

Challenge statement: Carwow wanted to offer its private sellers and dealer partners a more seamless and protected experience when handling sales and transactions secured in their online car auctions. 

Previously, all transactions between dealers and private sellers were conducted away from the Carwow platform, leaving both parties frustrated by operational challenges, particularly those faced by large enterprise dealers when triggering payment to private sellers and finance companies at the point of the car handover. 

Both Carwow and its dealer partners needed better control and visibility over the flow of funds so they could collectively provide a significantly improved experience for cars transacted on Carwow’s auction platform.

Sally Foote

Chief Commercial Officer at Carwow

"One of the main challenges we faced was ensuring a seamless, reassured and secure transaction process for both private sellers and dealer partners. By embedding Airwallex’s payment solution, we are now able to address these concerns, providing private sellers with extra confidence and ease when selling their cars to our dealer partners. This is crucial as it directly impacts the sales conversion rate and experience for private sellers and dealers alike, making our marketplace simpler, faster and safer than ever."

The Solution

Carwow partnered with Airwallex to implement an embedded solution, a white-labelled product customisable to Carwow, allowing them to keep the payments process entirely within their platform, brand, and user experience. The initial integration was specifically designed to enable UK car dealers to handle transactions in GBP within the UK market, with the aim of offering the functionality to Carwow's international markets in the future, allowing those dealers to also process payments through the same infrastructure in their respective local currencies and markets.

The core use case provides a structured financial infrastructure that enables dealers to send fast and secure payments to private sellers directly through the Carwow platform. Dealers receive a Carwow account (i.e. a whitelabelled Airwallex Scale Native connected account), which includes GBP bank details to wire payments and store funds securely for purchasing cars. This setup not only enhances the trust, transparency, and simplicity of transactions but also aligns with Carwow's mission to provide total confidence through superior customer experiences.

Sally Foote

Chief Commercial Officer at Carwow

"Partnering with Airwallex has made this possible for us. Their secure and technologically advanced financial solutions will greatly enhance our proposition, ensuring sellers can hand over their cars to our dealer partners and receive payment for it almost instantly. The sophistication of Airwallex's financial infrastructure will allow us to scale our operations seamlessly while maintaining compliance with financial regulations and security standards, which is absolutely paramount in our industry."

How it works

1. Dealer sign-up and account setup

Dealers begin their journey to more seamless transactions by signing up for Carwow’s payment service, powered by Airwallex. During this process, they agree to the terms and conditions and are provided with a digital wallet inside their Carwow account. This account, powered by Airwallex's white-labelled Scale Native solution, serves as the financial hub for transactions on the platform.

2. Account funding

Once their account and digital wallet is established, dealers can top it up with funds. This streamlined process ensures that dealers always have funds ready to transfer to private sellers to complete transactions immediately. This feature was specifically designed to save dealers on cost and time, thereby improving margins on each car. Dealers no longer need to spend time manually coding in each beneficiary to release payments, and they can avoid high fees when making transfers to multiple beneficiaries (typically £8 per transaction). This is only possible through the unique build of the Airwallex integration.

3. Bidding and payment

Carwow’s online auctions mean dealers can bid on thousands of cars owned by private sellers every week. Upon winning a bid and arranging the car handover with the seller, dealers can directly start the payment from their Carwow account in just a few clicks.

4. Clearing Finance

In addition to directly starting the payment to the seller, dealers can now simultaneously clear any finance ahead of the car exchange, including the collection of a negative equity balance.

5. Payment notification and transfer

When a payment is initiated, the seller receives an immediate notification informing them that the payment is being processed. This feature is enabled within the Carwow software, which detects and reads when transfers are made (via API), ensuring real-time updates for both parties involved in the transaction.

This efficient and secure system enhances the overall user experience by providing a seamless, transparent, and reliable method for conducting transactions, fostering trust and simplicity in the car-changing process.

The Result

With the implementation of Airwallex's services, Carwow has successfully brought digital payments onto their platform, significantly reducing the estimated £250 million in transactions previously handled outside their ecosystem. This shift hasn't only given private sellers a better experience by receiving faster payment for their cars, but also enables Carwow’s dealer partners to overcome significant operational hurdles to acquire used cars through a more structured, efficient, and reliable payments process.

Will Morgan

Senior Product Manager at Carwow

“The implementation of Airwallex’s solutions was incredibly smooth, with a dedicated and professional team to guide us. Their clear communication and ongoing support made the process of integration seamless, and it’s exciting to see the positive impact on our operations, without any interruption to our day-to-day processes.”