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Sep 12
2011
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According to a Business Wire article there are more than 100 million “unbanked” consumers living in the United States today. Many banks and financial intuitions have started to offer prepaid debit cards as a method to help solve the financial needs of this large segment of customers. These “unbanked” residents represent a large portion of potential renters in the multi-family housing industry. Before the option of paying rent with prepaid debit cards, these individuals would have had an immense amount of trouble making secure rent payments.
Prepaid debit cards work much like regular debit or credit cards, except they are not tied to a bank account or credit account, allowing a broader range of people to use them. Below are several of the benefits that accepting prepaid debit cards can bring to a property.
Benefits of prepaid debit cards for residents:
·Pay Rent Online- Electronic payments are the way of the modern era. With prepaid debit cards residents can make their rent payments online without ever having a banking account or credit card.
·Secure Payments- There’s no need to worry about security issues when prepaid debit cards are used to make payments instead of cash or money orders. Payments are delivered securely as long as you use a PCI Compliant online payment processor.
· Avoid Check Cashing Fees- For residents without bank accounts; cashing checks can get really expensive. Taking advantage of the direct deposit feature of prepaid debit cards can eliminate this expensive and unnecessary hassle.
·No Interest- With prepaid debit cards, money is taken directly out against the balance on the card that has been previously paid for. Since no money has been loaned, there are no interest charges.
·No Debt- Since no line of credit has been extended, there’s no danger of going into debt. If there’s an attempt to use the card for more than its available balance, the transaction will be denied.
·Make Purchases- Residents can use prepaid debit cards in stores and online without having a bank account or credit account, allowing them to shop in a wider variety of places.
Benefits of prepaid debit cards for property managers:
·More Potential Residents- Accepting electronic payments, and thus prepaid debit cards, at your property opens up a much larger segment of potential residents to your business. The large portion of “unbanked” residents in the US will be able to rent at your property if they can use prepaid debit cards to pay rent and utility fees.
· Secure Payments- Prepaid debit cards are a safe and secure way of collecting rent payments from a group of residents who would otherwise use cash or money orders to make rent payments. This allows your business to collect rent securely and to not worry about the manual accounting that comes with cash transactions.
·Fewer NSF Payments- With prepaid debit card transactions, there is less worrying about non-sufficient fund check payments and the effort to re-capture the funds from your residents. There is no checking account attached to a prepaid debit card so either the money is available and the payment is processed or the card is immediately declined.
·Fewer Late Payments- Cut down on late payments by offering more flexible payment options to your residents. Collecting rent payments online will save you and your residents time and money by avoiding cash and money order transactions.
·Higher Renter Retention- Studies show that more flexible payment options give your property a competitive advantage and increase renter retention. Residents will be less likely to leave if they feel their community is doing everything to make paying rent easier.
Residents with prepaid debit cards are able to utilize many new payment options including online pay, paying by text message and mobile iPhone Apps. Plus, residents are then eligible for a variety of benefits by making electronic payments including secure transactions, paying remotely, and rent reminder emails. With prepaid debit cards both property managers and residents win. Property managers get a larger number of residents to market to and residents get the ease and flexibility of electronic payments without the worries of having credit.
