Why should we accept rent payments or condo fees online?
In simple words, residents want it. A survey conducted by Property Solutions states that 79% of residents want to pay their rent online.
There are very few verticals today, that don’t accept payments online for their products or services. Until not long ago rent and other property fees were from the last hold outs. This has begun to change as more and more interest develops for establishing better customer service and ease of payments for residents of managed properties both rental and condominium towers. Property management historically is a slow moving traditional industry, but nevertheless landlords are beginning to understand the shift to the digitalizing of our society. What’s more, they are beginning to realize the efficiencies it actually brings to the table, as well as the cost savings that come along. Frankly, those who don’t subscribe to this new reality will fall to the way side. We need not look far; the CRA is phasing out cheques by April 2016. There will be more to follow.
As builders continue to build up in to the sky with new condo developments, competition is fierce, vying for new customers and residents. As they try to distinguish themselves and differentiate themselves from others, developers and managements look for new ways to create value and simplicity for their potential buyers and renters.
Online payments are quickly becoming a must in today’s increasingly digital landscape.
The online rent payments industry has been around for quite a few years now, mainly in the US. Here in Canada we are much newer to this emerging trend. Within the last couple of years there has been a lot of talk and interest in this market; from managers to residents it’s beginning to become a hot button topic.
With companies such as Rentpayment.com and Paylease from the US processing billions of dollars a year in property related payments, the Canadian market which is traditionally a few years back is ripe and ready to tackle this market.
What options are available now?
- Cheques. Yes, believe it or not that is still the number one method of rent payment acceptance.
- Pre-authorized debits.
- Post-dated cheques
- Bank Online Bill payments
- Cash and certified cheques
- Credit cards
There are advantages and disadvantages.
Cheques at face value look like a reasonable and affordable method of collecting fees. Dig a little deeper and you see this can be quite expensive and a big strain on productivity. Firstly, just collecting and depositing cheques is quite a hassle.
- First the tenant writes a cheque-which costs them money.
- Then they’ve got to get the cheque to the management, which means either getting a stamp and envelope and mailing it which also costs them or bringing it to the management office at office hours.
- Once that’s done the manager needs to input the data into the tenant’s ledger.
- Then the manager needs to send the cheques to the main office to bring to the bank, or bring it himself to the bank and wait online to deposit the funds.
- Property management is not informed for days if there are NSFs or other reasons the cheques haven’t cleared. Nothing takes place in real time.
The cost of time for managers to collect, input data, go to the bank and reconcile accounts are substantial, besides the added potential of mistakes and security breaches from manual processing and the shear amount of different people handling those cheques.
Pre authorized debit is a relatively new method of payment acceptance for property managements. It has proven to be quite beneficial in providing a cost effective way to collect recurring fees from residents on a consistent basis. The disadvantages of using a typical bank’s EFT system are not to be discounted.
- It’s a paper based error prone setup.
- Resistance from residents because of lack of control.
- The bank account or payment method as well as dollar amount cannot be changed easily.
- There is the lack of integration to your property management systems. This causes a disconnect as well as the need for double entry and the possibility of mistakes happening along the way.
- Because residents have a harder time updating their payment methods or changing their bank account information, the result is more NSFs.
- It’s not immediate. With real time updates and notifications you have the ability and data to really be productive.
Post-dated cheques do have the advantage of having your money in your hand so to speak (if they actually clear). However you’re stuck with the same negatives of regular cheques, as mentioned before, plus the complications of storing and processing those cheques over the year.
Bank online bill pay is becoming more popular. The disadvantage is firstly the disjointed payment reporting. It becomes another method of payment but does not simplify the reconciliation process if anything it complicates it. Secondly, there are costly set up fees to start up and connect to all the banks. Also, because it is totally a bank function it does not do anything to positively boost the image of your management.
Cash and certified cheques lastly are not a great option today. Cash is not a good thing for managers or office personal to have on hand. There is the added risk of theft and unfortunately in house stealing does occur from time to time. Certified cheques are not cheap and sometimes require more than one cheque to cover the full payment amount. That’s aside from the inconvenience of actually getting them.
Why do I have more to gain by using an online rent payment provider?
There are numerous reasons that you should be using a company like Payquad to accept rent payments online.
Firstly, you want a company that specializes in payments, so you get the most energy devoted to your bottom line. Secondly, a company that specializes in your industry is vital. They will have the experience to understand your specific needs and challenges as a property management company, as well as a system which is tailored specifically for your type of business.
But the main advantage is the ability to collect payments online from a company branded portal that’s available to your residents at any time, on any device, anywhere. Yes, that means your tenant can be in Tokyo and pay rent on-time. Or they can setup a recurring payment and get notified of their payment by email or check its status in real time on their portal. With credit and debit card options as well as direct debit transaction capabilities you are on your way to worry free payment collections.
An online rent payment solution puts regular cheques to the side and focuses on automating the collections process. One time and recurring direct debits and the ability to accept credit card transactions on your portal, allows for digital processing resulting in an efficient and automated cash flow structure. The best part is that it’s FREE at PAYQUAD.COM
