Boost On-Time Rents by Allowing Internet Payments

Want a cutting-edge method to boost on-time rent payment and cut your monthly rent paperwork? Consider allowing your residents to pay their monthly rent via the Internet. Although paying rent via the Internet is still new, more and more apartment communities are allowing it.

To help you decide whether allowing Internet rent payments is right for your community, we spoke with several companies that offer the service. We’ll tell you how they operate.

How Internet Payments Work
First, you must contract with an Internet application service provider (ASP) – a company that has developed a program with certain practical capabilities – in this case, enabling rent payments to be made over the Internet. To process payments, most ASPs team up with companies in the business of electronic bill presentment that provide necessary relationships with banks and credit card companies, says David Fontaine, public relations manager with CheckFree, a company that has teamed up with several ASPs to enable the processing of rent payments over the Internet.

ASPs’ arrangements with communities vary. Here are some of the major differences. Decide what characteristics are important to you before choosing an ASP.

Some ASPs accept payment by both credit card and electronic funds transfer (EFT), which allows the rent to be debited directly from the resident’s bank account. Other ASPs accept only one of these forms of payment.
Some ASPs charge communities an annual membership fee that can range from a few hundred dollars to up to $1,000 or more – often depending on the size of the community. Others charge the residents a processing fee that can be as little as 50 cents per transaction or up to several dollars. You’ll have to decide whether you want to bear the cost or let your residents bear it.
ASPs’ payment notification methods vary. Some will e-mail you as soon as a resident has authorized a payment. Most will provide you with daily, weekly, or monthly accounts of resident payments. Others can interface with your management software programs and post resident payments directly to their individual accounts. Most ASPs that we spoke with plan to be able to provide this service in the near future if they don’t already provide it.

Benifits of Internet Rent Payments
Accepting rent over the Internet can make life easier for you and your residents. Here are a few of the benefits of Internet rent payments:

Reduce late payments. Since many of your residents probably spend a lot of time of the Internet already, allowing Internet rent payments will increase the likelihood of on-time payments, says Fredrick l. Smith, chief operating officer of Payment Service Network, Inc. (the parent company of RentToPay.com, an Internet rent payment company). Residents won’t have the excuse of not having a stamp, an envelope, or enough time to drop by the management office with their payment. Plus, if resident opt to have the ASP pay there rent automatically each month, this will eliminate late payments for them. And since most Internet rent payment companies allow residents to pay rent with credit cards, this may help eliminate late payments for residents with cash flow problems in a given month. This was especially important to Jeff Funnell, property manager of Wisconsin’s Sprague Properties, whose residents now use the “low on cash” excuse less frequently. Plus, residents like being able to maintain a good payment history, he adds.

Help attract busy professionals. Internet rent payments can help attract busy professionals to your community. They’ll appreciate the convenience of paying rent over the Internet at any time and from anywhere in the world, says Smith.

Improve cash flow. Internet rent payments are processed immediately and can reach your account in as little as two days. You needn’t wait for the check in the mail, which can take three to four days to reach you. Nor do you have to wait for your bank to clear the check once it has been deposited, which could take another three to five days. Internet rent payments improve cash flow by allowing you to get rent processed into your account and earn interest quickly.

Less paperwork. Because the payments are coming electronically, you needn’t deal with the hassle of opening rent check after rent check. Plus, some companies will hook up with your management software programs and automatically post the Internet rent payments to the appropriate resident’s account so that you don’t have to.

No equipment or software necessary. Unlike other rent collection options, such as the use of rent kiosks, accepting Internet rent payments doesn’t require equipment. Nor will you have to buy any software.

Eliminate returned check fees. With Internet rent payments, you won’t have to deal with checks returned from banks for insufficient funds. “If payment is made by EFT, we make sure there are sufficient funds to cover the payment first,” says Smith. “If the funds aren’t available, the payment won’t get processed,” he adds. Funnell likes the fact the RentToPay.com notifies him as soon as a payment is authorized and then again when the payment has been deposited into his account, which is typically two days later. This way, he knows in two days if a payment is insufficient.

How to Accept Internet Payments
We spoke with a few ASPs to learn the types of services they provide to apartment communities. Here’s how they operate:

RentToPay.com. For an annual membership fee of $350, owners can establish an account with RentToPay.com, with no monthly fees. If the community has a pre-existing Web site, RentToPay.com will provide a link from the community’s Web site to its Web site, says Smith. The link will be an icon that says something like “click here to pay rent,” so that residents can easily make their Internet rent payments. If the community doesn’t have its own Web site, RentToPay.com will give it an account number, which the community can distribute to its residents. Then when residents want to pay rent, they can go directly to RentToPay.com’s Web site, enter the account number, and link up to their community’s account number. If residents forget the community’s account number, they can get into the community’s account by typing in the community’s name.

RentToPay.com accepts payments by credit card or EFT. For EFTs, payments authorized from residents’ checking accounts are routed through the Federal Reserve Bank and deposited directly into the owner’s account, says Smith. RentToPay.com charges a $1 processing fee for each payment made from a checking account. Owners can choose to pay the processing fee for their residents or to pass it on to residents, in which case residents will be reminded of the processing fee when making their payment.

RentToPay.com also offers residents the option of making automatic payments. That means residents can authorize RentToPay.com to store their payment information and pay their rent automatically each month. That way, residents don’t have to think about paying rent each month.

RentToPay.com offers managers several notification options. Managers can opt to get an e-mail as soon as a payment is made. Managers will also get monthly statements listing all transactions for each month. Plus managers can sign on to RentToPay.com’s Web site and get a real-time, up-to-the-minute log of what has been paid, whenever they like, says Smith. RentToPay.com plans to soon be able to interact with property management software, which will enable it to credit a resident’s account directly when a payment has been made, says Smith.

RentToPay.com
8025 Excelsior Drive
Madison,WI 53717
E-mail:info@RentToPay.com
www.RentToPay.com