How Payments Work Across the Tire Industry Supply Chain

The tire industry connects raw-material suppliers, manufacturers, distributors, dealers, fleets and consumers, and the payment system that links these companies is fragmented. Different parts of the supply chain rely on different payment methods, credit terms and financing arrangements, so the way money moves depends heavily on who is paying whom.

At a high level, business-to-business payments rely mainly on invoices, trade credit, ACH, bank transfers, wires, checks and financing, while consumer payments rely mainly on credit and debit cards, cash, digital wallets and financing. Payment terms can range from immediate payment to 30, 60 or more than 90 days. Trade credit is especially important between manufacturers, distributors and dealers, and financing is used throughout the chain to manage the gap between selling a product and receiving payment for it. The result is a financial supply chain running alongside the physical tire supply chain.

The physical supply chain can be simplified as a path from raw materials to manufacturers, then to distributors, dealers and finally fleets and consumers. Money generally moves in the opposite direction, from fleets and consumers back through dealers and distributors to manufacturers and their suppliers. The speed of payment, however, is very different at each stage.

Supply-chain stage	Common payment methods	Typical structure
Raw materials → Manufacturer	ACH, bank transfer, wire	Invoice + payment terms
Manufacturer → Distributor	ACH, bank transfer, wire	Trade credit, often 30–90 days
Distributor → Dealer	ACH, check, card, online payment	Dealer credit account
Dealer → Fleet	ACH, check, fleet account	Invoice / consolidated billing
Dealer → Consumer	Card, cash, digital wallet	Immediate payment
Online retailer → Consumer	Card, PayPal, wallet, financing	Online checkout
Financing relationships	Factoring, supply-chain finance, consumer credit	Third-party capital

The main difference is simple: consumers usually pay immediately, while businesses frequently pay later. The gap between delivery and payment creates significant working-capital requirements across the industry.

Tire manufacturers purchase large quantities of natural and synthetic rubber, carbon black, steel and chemicals, along with manufacturing equipment, energy, transportation and logistics, and professional and industrial services. These are primarily B2B transactions.

Typical payment process

The process generally runs from purchase order to delivery, invoice, approval and finally payment. Settlement usually happens through ACH, domestic or international bank transfers, wires or other electronic B2B payment systems; credit cards are generally less important for large industrial purchases.

Payment terms

Suppliers normally do not receive payment immediately. Typical arrangements include Net 30, Net 45, Net 60 and Net 90, as well as other negotiated terms. Published Michelin purchasing terms, for example, have specified a default of 90 days end-of-month where another payment term is not established and where local law permits. Longer terms allow manufacturers to keep cash longer and reduce their immediate working-capital requirement, but they also increase the amount of time suppliers must finance their own operations.

Supply-chain financing

Suppliers that do not want to wait may use supply-chain finance. In a typical structure, the supplier sends an invoice, the manufacturer approves it, a bank or financial institution pays the supplier early, and the manufacturer then pays the financial institution on the normal due date. Goodyear reported supplier-financing programs of up to approximately $876 million at the end of 2025. Payment terms between suppliers and manufacturers are, in other words, also a form of financing.

Manufacturers sell finished tires to distributors, wholesalers, automotive manufacturers, large retailers, commercial fleets, dealers and other business customers, and most large transactions are invoice-based. The manufacturer ships the tires, the customer receives an invoice with a defined payment period, payment is eventually made through a bank, and in the meantime the manufacturer records the unpaid invoice as accounts receivable.

Continental provides a useful example. For many of its industrial and replacement sales, average payment terms are approximately 60 days and the majority of payments are made through bank transfers, while consumer transactions are more likely to use cash or cards.

Large amounts of capital sit in receivables

At the end of 2025, Continental's Tires business reported approximately €2.46 billion in operating receivables and €2.40 billion in inventory. These figures illustrate an important feature of the industry: capital can be tied up in raw materials, finished tires, warehouse inventory, products already delivered and invoices waiting to be paid. The payment cycle therefore has a direct effect on working capital.

Manufacturers do not always wait for customers to pay. They can sell receivables to financial institutions through factoring programs: the manufacturer sells tires, the customer receives an invoice, a financial institution purchases that receivable, and the manufacturer receives cash earlier while the customer eventually pays as agreed. The benefits can include faster access to cash, lower accounts-receivable exposure, improved working capital and more predictable cash flow.

Goodyear reported approximately $892 million of trade receivables sold through off-balance-sheet factoring programs at the end of 2025. An unpaid tire invoice, in this sense, can itself become a financial asset.

Distribution is one of the most payment-intensive parts of the tire industry. Large distributors operate warehouse networks containing thousands of tire brands, models and sizes. American Tire Distributors operates more than 100 distribution centers and regional facilities, and its network provides access to roughly 90,000 tire SKUs; U.S. AutoForce operates more than 70 distribution centers. Dealers can place orders online and receive frequent local deliveries, which creates a high volume of B2B transactions.

Why distributors use credit accounts

A dealer may order tires several times per month, several times per week or, in some markets, multiple times per day, so making a separate payment for every delivery would be inefficient. Instead, the distributor approves the dealer for credit, the dealer places orders, and each delivery becomes an invoice that accumulates on the dealer's account until it is paid according to agreed terms.

Dealer credit terms

TireHub's published credit documentation provides an example. Approved customers have historically operated under “Net 10 Prox” terms unless otherwise specified: purchases accumulate during the month, a statement is generated, and the balance becomes due on the tenth day of the following month.

Dealer portals can also let customers place orders, view invoices, check balances, review statements and account history, store payment information and make electronic payments. Payments are increasingly becoming integrated directly into ordering systems.

When a distributor allows a dealer to pay later, it is effectively providing short-term financing. Suppose a distributor ships $20,000 of tires: the dealer receives the inventory immediately, sells some of it to consumers, collects their money and pays the distributor later. The distributor carries the credit risk in the meantime.

Before providing credit, distributors may review a dealer's business credit history, bank and trade references, previous payment history, business size, years in operation, existing debt and existing credit exposure, and then assign a credit limit.

Payment behavior affects purchasing power

A dealer that consistently pays on time may receive higher credit limits, more favorable terms and greater purchasing capacity. A dealer that pays late may instead face lower limits, credit holds, reduced purchasing capacity, prepayment requirements or collection activity. Payment history can therefore directly affect a dealer's ability to purchase inventory.

Tire dealers sit between two different financial systems. They purchase inventory using trade credit, ACH, checks, cards, bank transfers and online distributor payment systems, but they are paid by consumers through credit and debit cards, cash, checks, Apple Pay, Google Pay, PayPal, private-label credit cards and consumer financing.

This creates an important timing difference. A dealer may receive tires today, sell them today, receive the consumer's card payment quickly and pay the distributor several weeks later, and that timing can provide useful working capital. Dealers also carry expenses such as payroll, rent, equipment, inventory, taxes, card-processing fees, insurance, warranty costs and the distributor payments themselves, so managing payment timing is important to both profitability and liquidity.

Tires can be an unexpected and expensive purchase. Replacing four tires can easily cost $600, $800, $1,000 or more than $1,500, and consumers may not have planned for the expense. Retailers therefore offer financing alongside normal payment methods. Discount Tire, for example, supports major credit cards, debit cards, cash, PayPal, Apple Pay, Google Pay, private-label credit and Affirm, while Tire Rack supports major cards, PayPal, manufacturer-branded credit programs and Affirm.

Why financing matters

For the consumer, financing reduces the immediate cash requirement, converts a large expense into smaller payments and can make an unexpected replacement more affordable. For the retailer, it can increase purchase conversion and support larger transactions while transferring much of the consumer credit risk to the financing provider. Consumer financing is not separate from the tire sale; it can directly affect whether the sale happens.

Fleet payments are more complicated than normal consumer transactions. A fleet may have hundreds or thousands of vehicles operating across multiple states, several servicing dealers, different tire brands, emergency roadside purchases and national pricing agreements. Paying every individual service location separately would create significant administrative work.

National-account programs solve this through centralized billing

In a typical structure, the fleet negotiates pricing centrally and a driver receives service from an approved dealer. The transaction is authorized against the fleet account, the dealer records the service, and invoice data is sent into the national program, so that the fleet receives centralized billing and payment is reconciled in one place.

Fleet payment platforms can combine authorization, invoicing and billing with vehicle information, service history, location data, spending reports and payment information. Bridgestone, for example, provides fleet systems combining billing, invoice management, service information and spending data. For fleets, the payment itself is only one part of a larger data and authorization process.

B2B payments are moving toward electronic systems. According to the 2025 AFP Digital Payments Survey, checks represented 26% of B2B payments, down 7 percentage points from 2022. ACH continues to grow: Nacha reported approximately 8.1 billion B2B ACH payments in 2025, nearly 10% year-over-year growth, and more than $63 trillion in total B2B ACH payment value.

Why companies move toward ACH

Electronic bank payments can reduce paper processing, mailing costs, lost checks, payment delays, manual data entry and reconciliation work, and they can improve payment visibility, cash forecasting, accounts-receivable automation and transaction data. However, tire businesses often serve thousands of customers who may still prefer different payment methods. As a result, companies often need to support several rails at once, including ACH, checks, wires, cards, online payments and financing.

Cards provide fast and convenient payment, with immediate authorization, a familiar customer experience, easy online payments and less check handling. But they also introduce costs, including interchange, processing and gateway fees, chargebacks and fraud losses.

This creates a trade-off for B2B sellers. A distributor may prefer ACH for a $20,000 invoice because the payment cost can be significantly lower than accepting a commercial card, while the customer may prefer the card for its rewards, convenience, payment timing and working-capital benefits. Payment optimization therefore involves more than simply accepting every possible method; companies need to weigh cost, speed, customer preference, fraud risk and working capital together.

Digital payments do not eliminate fraud. According to the Association for Financial Professionals, 79% of organizations experienced attempted or actual payment fraud in 2024. Important risks include check fraud, wire fraud, business email compromise, fake invoices, account takeover, fraudulent bank-account changes and unauthorized payments.

A common B2B example is supplier impersonation. A criminal impersonates a supplier and requests a change in bank information; accounts payable updates the account, the company pays a legitimate invoice, and the payment goes to the criminal instead of the supplier. Payment controls therefore need to cover supplier onboarding, bank-account verification and changes, payment approvals, user permissions, transaction monitoring, invoice matching and reconciliation. Moving money electronically does not remove risk; it changes the type of risk.

Real-time bank payments are becoming more capable of supporting large B2B transactions. The FedNow Service transaction limit increased to $10 million, and the RTP network operated by The Clearing House also supports individual transactions up to $10 million. This creates potential new use cases in tire distribution.

Example: dealer credit limit

Consider a dealer with a $100,000 credit limit that already owes the distributor $95,000 and needs another $20,000 order immediately. If the dealer makes a $20,000 instant payment, the distributor receives confirmation immediately, available credit automatically increases and the new order is released. Today, parts of this process may require manual intervention or waiting for payment confirmation; real-time payments could make it much faster.

Each segment of the industry experiences payments differently.

Segment	Main challenges
Manufacturers	Large accounts-receivable balances, long customer payment terms, supplier payments, working-capital management, international payments, cash forecasting, foreign-exchange exposure, fraud
Suppliers	Waiting 30–90+ days for payment, financing production before receiving cash, tracking invoice approvals, payment uncertainty, cross-border settlement
Distributors	Thousands of dealer accounts, credit underwriting, credit limits, invoice management, collections, payment reconciliation, supporting multiple payment methods, fraud
Dealers	Inventory financing, distributor payments, cash-flow management, card-processing costs, consumer financing, multiple payment systems
Fleets	Multiple servicing locations, invoice consolidation, authorization, spend control, reconciliation, reporting
Consumers	High unexpected purchase amounts, financing, payment flexibility, online checkout, fraud and security

The tire industry already has many ways to move money. The larger opportunity is connecting payments to the underlying transaction. A normal B2B tire transaction may generate a chain of records running from customer to order, product, delivery, invoice, payment and bank transaction, yet these records often sit in different systems: order data in an ERP, delivery data in a logistics platform, invoice data in accounts receivable, payment data at the bank, customer data in a CRM and credit information somewhere else. Connecting them creates several opportunities.

Reconciliation, credit and collections

Automated reconciliation can match incoming payments to the right customer, invoice, order, location and bank transaction. Credit analytics can use payment history to identify increasing payment delays, customers approaching credit limits, changes in payment behavior and potential default risk. Collections analytics can prioritize accounts by amount owed, days overdue, historical payment behavior, customer risk and probability of collection.

Working capital, optimization and fraud

Working-capital analytics can measure days sales outstanding, payment timing, the inventory-to-cash cycle, customer payment trends and supplier payment timing. Payment optimization can determine when to use ACH, card, wire, check, instant payment or financing based on transaction size, cost, speed, customer preference and risk. Fraud detection can monitor bank-account changes, unusual transaction sizes, new payment destinations, abnormal payment timing and changes in customer behavior.

Payments across the tire industry remain fragmented. The upstream supply chain primarily uses invoices, trade credit, ACH, bank transfers, wires, checks, supply-chain finance and factoring, while the consumer side primarily uses credit and debit cards, cash, digital wallets, PayPal, private-label credit and consumer financing.

The main opportunity is not simply adding another payment method. It is connecting orders, invoices, credit, payments, banking and customer data. Better integration can help tire companies receive money faster, reduce manual reconciliation, improve credit decisions and collections, reduce payment costs, detect fraud earlier, manage working capital more effectively and understand customer payment behavior.

The tire industry has spent decades optimizing the physical movement of tires through the supply chain. There is still significant room to improve how money, credit, and financial data move through that same network.