Money Matters

By Christopher Hosford, Contributing EditorEffective resident payment technologies do more than just get money in the door. Providing residents with efficient, flexible ways to pay their rent can be an excellent customer-service, as well as a resident-retention and new-customer acquisition, tool.Today, there are some intriguing new innovations in rent-payment technology that can make the process even more useful to both communities and their residents.”Having a multimedia approach to payment is critical to the success of rent-payment programs,” says Mike Radice, president and CEO of NWP Services, a leader in utility cost recovery and a player in the rent-billing arena. “It derives from resident proclivities month-to-month, their convenience, and their circumstances.”To Radice, “multimedia” means offering a full gamut of payment options, whether it’s checks that are then scanned for digital processing, automatic clearing house (ACH) online technology, automatic debit, cash payment at a money center (AKA “agent pay”), or payment by credit card.”Recent surveys have shown that paying rent or utilities online via ACH is enormously convenient to residents and one of the top five resident requirements,” Radice says. A full menu of optionsOffering the full array of payment options could be daunting for many multifamily communities, but it’s eminently practical. After all, residents pay their rent in a multitude of different ways depending on their circumstances, age, income and other factors. And individual residents may want (or even need) to shift among these various ways of paying on a month-to-month basis. Overwhelmingly, however, digital payment options rule the roost.”The goal is to keep a large portion of the property management staff on site as sales agents, helping keep the property full and residents happy, rather than in the office processing payments,” says Jason Gardner, VP-business development with PropertyBridge, a real estate payment processing provider. PropertyBridge, owned by MoneyGram, offers a unique approach to handling agent pay.”MoneyGram has a great relationship with Wal-Mart, CVS pharmacies and other retail locations near many properties, and residents can go there to pay their rent,” Gardner notes. PropertyBridge aims this service at lower-end communities, where residents tend to use money orders for rent payment.Big property management solutions provider Yardi Systems offers its own resident payment modules, including the company’s Yardi Portal, which (among other capabilities) allows residents to make online payments using ACH or their credit cards.”Another new solution is our electronic rent-processing system, called Yardi CHECKscan, which turns paper checks into electronic transactions,” notes Brad Setser, VP-marketing with Yardi. “CHECKscan significantly cuts the time, labor and errors associated with manual check processing, and saves property managers from going to the bank.”To be sure, there are caveats associated with some of the emerging rent-payment methods. For example, for payments by credit card, there’s the interchange fee, averaging about 1.75 percent, that’s levied by the credit card company on the property. “But today more than ever, having money in the bank is a valuable thing,” says Stuart Litwin, CEO of SureDeposit, a company that issues surety bonds in lieu of security deposits. “If you have a credit card payment scheduled for the fifth of every month, there is value in that.”And while auto debit may be convenient, in particular within student-intensive housing where “mom and dad” pay the rent, there may be some unease in opening up one’s checking accounts in this way.While payment options vary in usefulness and circumstance, there is value in offering a choice. “The message is, a flexible and responsive payment system needs to be offered for any resident in any month, and that is transparent to the property-management system,” Radice says. “When you add e-billing and convergent billing to the payment cycle, owners will get higher cash yields and get the good money faster.”To comment, email [email protected]