Killing the Paper Check: How Tekion and Increase Are Rewiring Auto Retail

PLEASANTON, Calif. – September 23, 2026 — For decades, the back office of the great American car dealership has been a paradox of modern retail. Out front, consumers purchase high-tech electric vehicles using seamless digital interfaces. In the back, dealership controllers are still stuffing envelopes, printing physical checks, and toggling between green-screen accounting software and disconnected commercial bank portals. Today, that anachronistic workflow faces a formidable disruption.

Automotive software provider Tekion has partnered with financial infrastructure platform Increase and Nebraska-based Core Bank to launch Tekion Spend, an industry-first embedded banking solution natively integrated into its Automotive Retail Cloud (ARC). The strategic alliance marks a critical inflection point in enterprise software: the moment when a vertical Software-as-a-Service (SaaS) platform stops merely recording financial data and becomes the financial institution itself.

Slated for a Q4 rollout to US dealerships, the new offering allows auto retailers to open fully featured, FDIC-insured commercial bank accounts directly within their dealership management system. By unifying the invoice, the payment execution, and the ledger entry, the platform seeks to eliminate the manual reconciliation that has plagued the automotive retail sector for over half a century.

The Dealership Payment Bottleneck

To understand the magnitude of this shift, one must look at the sheer volume of capital flowing through a modern automotive retail group. Dealerships are highly complex, capital-intensive operations. A single rooftop manages millions of dollars weekly across parts wholesalers, auction houses, sublet repair shops, and transport logistics.

Historically, 40 to 60 percent of these commercial B2B supplier outlays have been paid via paper draft. Dealership accounting relies heavily on a "tri-system disconnect" where the physical invoice, the dealership management system (DMS) ledger, and the external commercial bank portal exist in complete isolation. Controllers spend hours at month-end painstakingly matching cleared checks against general ledger entries—a process fraught with human error and vulnerable to factory audit sanctions if delayed.

"Tekion Spend gives automotive dealerships a fully-featured bank account inside their existing system of record," said Jamie Fox, GM of Fintech at Tekion. "It sees the invoice, the payment, and the ledger entry as one object rather than three systems reporting to each other after the fact. This is a natural step in Tekion’s mission to deliver end-to-end service for automotive retail."

By embedding the treasury function directly into the software where inventory and repair orders are already tracked, the new product automates accounts payable. It removes the friction of managing dozens of commercial bank accounts across multiple regional institutions, a common headache for dealer groups operating five to fifty-plus rooftops.

Navigating the Post-BaaS Regulatory Minefield

The deployment of this embedded finance tool arrives during a period of intense federal scrutiny over banking-as-a-service (BaaS) partnerships. Following the highly publicized collapses of fintech middleware providers and severe enforcement actions against partner banks in recent years, regulators like the FDIC and the Federal Reserve have cracked down on opaque ledger structures.

Historically, many fintechs relied on flawed aggregator models, pooling funds into single, commingled "For Benefit Of" (FBO) master accounts where the underlying bank remained blind to individual sub-accounts. The architecture engineered by the three partner companies actively dismantles this risky paradigm.

Through Core Bank's specialized Core X division, the platform opens individual, fully titled commercial demand deposit accounts in the exact legal name of the dealership. This structure guarantees true direct visibility and FDIC pass-through insurance, satisfying the stringent deposit recordkeeping rules proposed by regulators in late 2024. It also features an automated compliance layer that runs Know Your Business (KYB) checks and real-time transaction screening to satisfy Bank Secrecy Act and Anti-Money Laundering (BSA/AML) obligations.

"Tekion has built an impressive platform and has a deep understanding of the operational needs of today’s dealerships," said Lindsay Borgeson, President of Core X. "We are excited to partner with Tekion to bring even greater value to the automotive retail market and give their customers the confidence that comes from having their dealership funds held with a trusted, regulated financial institution."

The Infrastructure Underneath

Powering this regulatory compliance and real-time ledger synchronization is Increase, a financial infrastructure company that processes over $500 billion annualized for tech giants like Ramp and Gusto. Founded by an early Stripe engineer, the firm has taken an unorthodox path in the fintech space. Unlike legacy fintechs that rent middleware built on top of aging bank cores from the 1980s, Increase engineered its own "bare-metal" core ledger software from scratch.

This proprietary architecture connects directly to the Federal Reserve’s Fedwire and FedACH networks, as well as FedNow and The Clearing House’s RTP. Instead of handling check files and ACH batches as daily text uploads, the system treats every money movement as a sub-millisecond programmatic event. Furthermore, utilizing a multi-bank sponsorship model with institutions like Core Bank mitigates single-institution deposit concentration risk and allows for larger deposit syndication across sweeping networks.

"Increase exists to help ambitious technology companies build great financial products," said Jack Flintermann Reed, Head of Product at Increase. "We help our users get to market faster than they imagined possible. Prior to building the full product that’s launching today, Tekion built an initial working prototype on Increase APIs in less than three weeks."

Crucially, the engineers behind the integration recognized that the automotive industry will not abandon paper checks overnight. To bridge the gap, the API includes an automated check printing and mailing pipeline. An invoice approved in the software can trigger a physical check that ships the next morning with complete remittance details, returning a high-resolution image back to the digital ledger the moment it clears. It also mirrors the strict dual-control enterprise governance required by dealerships, ensuring that check signing and ACH authorization follow the exact four-eyes principles—where a controller approves and a dealer principal signs—via strict software permissions.

Challenging the Legacy Duopoly

The introduction of native embedded banking poses a stark challenge to the automotive software establishment. For decades, the DMS market has been a duopoly controlled by legacy providers CDK Global and Reynolds and Reynolds, which collectively command the vast majority of franchised dealer roofs in North America.

While both incumbents offer electronic payment bolt-ons, these are largely traditional merchant acquiring gateways for consumer credit cards or scheduled virtual card batch engines. Neither functions as a true embedded commercial bank that replaces the dealer's off-platform treasury relationship. Furthermore, both legacy giants have faced severe headwinds regarding monopolistic data practices, with CDK Global recently entering a $100 million antitrust class-action settlement over closed data access, following a similar $29.5 million settlement by Reynolds and Reynolds.

In contrast, Tekion’s cloud-native, open-API architecture is positioning itself as the modern alternative. Valued at over $4 billion and backed by major automotive OEMs including General Motors and Hyundai, the company is leveraging its modern tech stack to do what legacy systems cannot: turn the software into a primary financial institution.

Accounts payable is merely the beachhead. The company has already signaled plans to expand this embedded banking service into other massive dealership cash flows, including floorplan financing, sales, servicing, and payroll. As vertical SaaS platforms continue to swallow commercial treasury, the automotive showroom floor is rapidly becoming the next great frontier for financial technology, proving that the most lucrative disruptions often happen in the back office.