Topic: E-Payments: Are you accepting

E-Payments: Are you accepting (or want to accept) credit cards and e-checks for rent collection?

Success stories, questions, comments, etc - open discussion on e-payments as an amenity to attract and retain residents.

We use Rent Payment and we love it.It will take checks,credit and debit cards.You can set up monthly payments,pay monthly,or even have it send your cell phone a text message to remind residents of their rent,text "PAY" back and it pays the rent with the mthod the residents set up. Collections are much less time consuming and the money gets to the bank faster.I'd hate to be without it.

Oh yeah I do. I mean, it's like one of the most convenient ways for money transactions, right? PayPal is great and this helps me a lot in my business transactions as it saves me more time and effort too. My clients are good payers so they pay on time and e-payments are really cool.

I wish my site had a way to accept cards or online payments. We aren't even at the point where we can take online applications, although my screening agency says they are working on that (that was over a year ago.) I've been asking for these things for years, but it's too expensive for my owner.

Kris, We have used Rent Payment in the past, but we have been using Property Solutions for a little over 2 years. It has been incredibly successful for us as it not only accepts online payments (credit cards & e-checks), but as soon as our residents pay it interfaces with our PM software.

Taking payments this way is not only convenient for residents, but it also eliminates administrative time for our onsite teams.

Jennifer... we created our own portal to accept payments. We are ready to do a trial run on one of our properties. What did you do to get the word out in regards to this? Does Property Solutions do the tech support for you?

Bill, Initially we distributed flyers. We were not collecting email addresses back then, but an email campaign would be very effective as well.

Our leasing teams also include the benefit of online payments as a selling tool to prospects and help residents set up their access to the site upon move in.

As far as technical support, it really depends on the issue. If it is something that we can address we will, otherwise they do provide full technical support for the portal.

Hi Jennifer - RentPayment integrates with all the major accounting software too, such as Yardi, AMSI, MRI, and many more. We also go one step further than Property Solutions and have a dedicated marketing team that helps drive resident adoption for your e-payment solution.

in our 187 unit class C community, we are using rentpayment. We have had 2 payments in two months. We knew our clientèle was less likely to use it....but since there is no real cost to ownership, we decided to use it. Prior to this we did not accept credit cards as well. We believe the convenience may improve retention a bit, but the jury is still out.

This is exactly why my owner doesn't want to implement it at my 83 unit B property. It's not worth the expense if so few people use it. I have had about a half dozen requests for card payment or online payment from residents, and a about the same amount of requests from prospects who wish they could apply online with a card.

To those of you who are using online payments, does the company or the resident pay the convenience fee? We have found a much higher adoption rate by not charging the resident any fees. Also, those of you using RentPayment, do your residents who pay by credit card have to call an 800 numberin order to make that payment due to the issues that the same convenience fees have to be charged for ACH and Credit Cards if in the same channel?

Our survey found that residents would not use online payment if they had to pay an extra fee. The owners will not offer the service if they have to pay the fee. So we do not offer online payments.

We just started using RentPayment about a month ago. It is most popular among our out of town applicants. We have onlu had one complaint on the fee, but they still paid it. I think it is great to have for those that need the convience, with our contract we have no out of pocket expense so it does no harm to have it. So far it has worked great!

We waive fees for online application fees, but the residents are responsible for any convenience fees associated with online rent payments.

We have done promotions to increase participation, like a one time $50 concession for setting up a recurring payment on or before the 1st of the month. This usually more than covers eCheck convenience fees for a year.

Great idea Jennifer! I think I will suggest the one-time concession.

Like most changes, residents will complain but most of them will go along with it. The convenience factor today most residents will be more than willing to pay for. The site should not have to pay for this fee, as it is the "convenience" of the resident to use it. You have to sell the advantages.

Residents pay the convenience fee. It is only $ 1.95 for e-payment from checking or savings accts. Approx. 5% for credit/debit card payments.

E-checks are an easy sell, especially since rent is due on the 1st and $15 late fee on the 2nd. $ 1.95 is a lot cheaper than late rent.

Works great for residents who are out of town, parents out of town who pay their student/child's rent, etc.

Our residents at most properties love having the option.

We just started managing a 55+ property. Online payment is not popular there since many don't have a computer or know how to do this. They want ACH debit so they don't "forget" so rent can auto pay the same day social security posts to their acct.

How about an alternative. Staff in the office assists them with a computer in the office or one in your business center with it as a favorites or icon on the desktop. In addition to that, maybe a bootleg sign at the entrance beginning on the 25th of the month to let them know they can come to the office for assistance on the computer.

Thanks for the suggestion. We just did a mgmt takeover there 4 wks ago & am short staffed. The residents liked the ACH option offered by the mgmt co previous to the last co, that I am going to check into that option first.

I see from both sides how electronic payments are more convenient and easier to manage. My problem, as a resident who MIGHT use a credit/debit card to make a payment (I do this regularly because it gives me records of all my transactions); is that 'convenience fee'. Let's say Rentpayment charges 5% of the actual transaction as a convenience fee. If my rent is $1000, my RENT just went up by $50! I can certainly think of better things I can use that $50 for than an added fee to pay my rent.

Let's take it a step further. I have been using my bank's (I bank with BofA) online banking for years. In order to use their BillPay service, you need very little information to set up a new payee:

1) Name and address of the payee (Property manager office).
2) Amount of the payment.
3) Date the payment needs to arrive in the office.
4) My name and unit number that needs to appear on the check.


What I did is set up my property as a payee for a RECURRING payment of my (rent amount), needing to arrive in the office no later than the 2nd of the month; with my NAME and UNIT number printed on the check. What my bank does is start the process on about the 26th of the month, cutting a check to the property as requested, places a hold on the funds until the check is presented for payment, and they drop it in the mail. I also receive an alert that the process has begun. This costs me nothing more than a few minutes to enter the information initially and to update the information whenever my rent is scheduled to increase. I am never late with my rent, I never have a check returned NSF, and I do not pay extra for the service.

When the property deposits the check, a copy of it is viewable when I log into the BofA website and look at my transaction history.

A number of large banks and credit unions offer this kind of service, and may or may not charge the customer depending on the kind of account they have. I suspect the amount of information that any bank needs to do this is similar.

Tell me why I would use any service you may offer that charges a 'convenience fee' when I can do the same thing for FREE??

I might be more inclined to use your service if the owner chose to pay any of these so called 'convenience fees'. What the decision makers need to understand is that doing so can increase the adoption rates of the service, which also improves delinquency in your favor. If there is a convenience fee, I would suggest lowering the rent by that amount. Let's use my amount of $1000, with a convenience fee of 5%. This would make the Rentpayment transaction $1050. Why not eat that convenience fee by dropping the rent to $952.50, if I choose to make this a recurring transaction? This makes the Rentpayment transaction $1000 ($952.50 + $47.50= $1000). This way, my bottom line does not change.

As a team member; I would suggest an alternative to the convenience fee being charged to the resident, negotiate a flat monthly fee, based on the NUMBER of transactions that are run that month through their system. Instruct the vendor to send YOU a bill for those transactions.

22% of our 12,000 units chose to pay on-line either by CC or ACH in April. We use RealPage Payments and do not plan to implement a convenience fee at this time as I believe a fee serves as a deterrent to resident acceptance. If we were to ever do this it would be in the range of $2-$5. We also use a scanner at our communities for those who choose to bring their payment to the office. While there is a cost related to this, I believe the benefits far out weight those costs:

More timely payments mean better collections and the money gets in the bank faster.

Fewer ledger posting errors as a result of integrated systems. The payment is automatically posted to the ledger (both on-line payment and scanner)and the resident can see their ledger on-line.

Less staff involvement and less traffic in the office means more time to spend with guests,serve residents and manage the community.

More staff on-site... more often. No more trips to the bank to make deposits.

Greater convenience for the resident increases resident satisfaction which translates into higher renewal rates.

Serves as a great sales tool by showing we are easier to do business with.

Let me start by saying that my comments and opinions are my own and do not reflect the views of my company.

I think all properties should accept credit cards and provide access to make payments online (including electronic checks and maybe even other means like PayPal) and I don't think you should charge anything for providing this service. To me, that's just the cost of doing business in 2010. How would you feel if you walked into McDonald's and they added 2-5% to your order for paying with a credit card? If that happened to me I would think they were CRAZY!

I understand how credit card processing works and obviously we're dealing with higher dollar transactions than McDonald's... it becomes a little more expensive. Again, I think that's just something that our customers expect and we should do without a fee.

At some point our customers expected us to answer calls and respond to service requests after office hours. We met that demand by employing an answering service. Most of those companies charge per call, but we don't bill the resident $1.90 (or whatever the cost) as a convenience fee each time they use it.

These check scanners are another hot button of mine...

First, setting up properties to use the scanners for 100% of their transactions isn't reasonable if you expect to stay within the law. To comply with ACH regulations employees cannot directly accept the payment and as much as we try I can't imagine that it doesn't happen. Even once is illegal.

And I disagree with the argument that payments get posted by your bank faster than if they were traditionally deposited in person. Yes, they may get transmitted to the BANK more quickly, but they are not available in your account for up to 72 hours. Most banks make the funds available the next business day when you bring a check to be deposited.

Seems to me that we're doing a job that the bank used to pay someone to do. Now, not only are we absorbing the employee cost, but we have to wait for our money longer.

I disagree with the comment on covering credit card fees. There's no ROI on it (in fact the ROI is negative). There might be a small ROI to an early mover, but only until everyone else matches up at which point the credit card companies have won (they get fees), the consumer gets a small win (from points or 1% pay back), and we lose. Then even the early mover loses in the long run. We'd get more credit from the consumer if we just gave them the 1% that points are typically valued at than paying a higher amount to the banks.

The comparison to McDonalds is a red herring. We're not restaurant or retail. As an example, Denver University used to offer credit card payments for tution. I paid by cc for my kids and got my 1% rebate. They realized the cost was killing them and now you can only pay by cc if you pay the discount fee. So I now pay by check. I'm sure many (most?) automobile dealerships don't take credit card payments.

I don't think consumers EXPECT high-ticket items to be payable by cc. They'll be happy to get their points, of course. Unfortunately, if enough rental companies start accepting, then maybe everyone will have to--but that's just to the detriment of all of us.

Ok, I can see a fee for using a CREDIT CARD (this is $$ I don't have); but I cannot see a fee for using a DEBIT CARD ($$$ I HAVE). If your service sees a DEBIT card as a CREDIT card (or cannot determine the difference); and wants to pass on a 'convenience fee' to your resident, I suspect your adoption rate will be low.

If I choose to pay online using your service, and I CHOOSE to use my DEBIT card; I refuse to pay a fee to use $$ I actually have, and I will set you up as a payee within my online banking. It may take me a few more minutes, but if I can avoid any additional charges, it is worth it. It should also be worthwhile to YOU to absorb these costs as costs of doing business, because it has the potential to reduce your delinquencies and labor related to them.

If you are also collecting utility payments, using a RUBS system, I would suggest implementing more than one way to collect them. Have the RUBS company send residents monthly statements; allow the residents to pay YOU directly with rent, or pay THEM online (either directly, or via online banking).

We developed an internal program with our bank more than 20 years ago that collects rent for all 1100 of our apartments through ACH. All of our leases are wriiten to collect rent this way so on one day of the month, our accounting office collects rent for the entire portofilo. This eliminates fruad, lost rent and huge amounts of staff time dedicated to rent collection on site and allows managers to concentrate on the 5-10% who do return on their rent.

Does this mean that the renter is required to open an account with that bank? Do they charge a monthly fee to do this?

Taking ACH payments may work for most of your residents who actually get paid on the first of the month, but what about those that don't have deposits until the 5th? Or those that actually have to GO to the bank to make their deposits and cannot do it in time?

Yes- they must have a bank account.

It is bill due like any other. The day it is due does not change, for us its the 3rd of every month, so it is up to them to be certain that the money is in the bank no matter what day they get paid. I assume most landlords do not customize rent due dates based on which day every resident gets paid.

I am sorry- I misunderstood your question. They do not have to have an account with my bank. It works with any bank but they must have a checking or savings account. It is an automated transaction between my bank and theirs. They sign a recurring authorization upon move in. There is no fee for the resident unless their rent returns which is like bouncing a check.

April Zimmerman wrote:

It is bill due like any other. The day it is due does not change, for us its the 3rd of every month, so it is up to them to be certain that the money is in the bank no matter what day they get paid. I assume most landlords do not customize rent due dates based on which day every resident gets paid.

I understand that, but when I was married, my ex-wife was a school teacher who did not get paid until the 10th; so it would take a little extra planning to make sure payments do not get refused. But when you have a large chunk of a household income not come in on the first of the month (if not all); it can be a problem when something major comes up (car repair, medical bill). If I was in that situation again, I would NOT sign a recurring transaction authorization, and would pay you with a check WHEN I GOT paid for the following month (i.s.; I get paid on the 10th of June, on the 10th of June, I would write you a check for my JULY rent). This way, my rent is the first thing that comes out (after taxes and other withholdings).

Hi David,

Can I ask what state you operate in? Your comments about check scanners concerns me as we are about to roll these out to all our sites and our bank is encouraging us to do so.

So you would pay your rent in advance of the due date? Our residents often park their payment in a savings acount and then their rent is sent ACH from there. This gets it out of their checking account for circumstances like you are describing. It takes some creativity sometimes on the part of the resident to manage their funds but I have never lost a lease over this policy.

I would do it to make sure my rent is the first thing that comes out of my paycheck. Besides, I have had problems with ACH transactions in the past, what happens when I decide to change banks or if I have a case that requires me to change my accounts?

Are there any out there without the huge fees to either the resident or the property. I was astounded the other day when I found out how much our property was paying. The resident fees were out of this world as well. I heard every credit card provider now has to charge fees comparable to Visa is this true? Any feedback would be appreciated.

We ran across this problem too Chance. The fees for a portal site are per unit. I've seen the industry say that only 20% of the people on site will pay online. Credit card fees eat up 2-3% of your rental amount. I've seen some companies charge a convenience fee to the resident to overcome this percentage. These fees can be anywhere from $1.95 per ACH to $33 for a credit card. So add it up... per unit costs per quarter or month, ACH fees by your bank, credit card fees all eat into your bottom line. What do you do? We developed our own Portal site. No monthly fees, minimal ACH fees by the bank. We do not accept credit cards so we don't have that issue. We can have the convenience of paying online without the unnecessary costs. It's working well for us. Obviously you have to have the IT structure to program your own. I am uncertain what outsourcing this would be.