Online bill pay has become a logical step for landlords and property management companies to take in this tech-savvy world, making rent collection more convenient and efficient than ever. While there are several benefits to online rent collection, both tenants and landlords have voiced a few common concerns over this shift to online payment. While these misconceptions are certainly understandable, we are here to squash the myths surrounding online rent collection so that you can comfortably and securely collect and pay rent.
Online Rent Collection is Not Secure
Online payment security is a common concern, and rightly so! Providing your credit card number or account and routing numbers to an online platform may feel risky, but transaction fraud is far less likely than you may think. Rent Payment Platforms take the proper precautions with modern encryption technology which encodes information so that only authorized parties can access it. Reputable processors will take even further steps in protection with SSL certifications, firewalls, and regularly scheduled system scans.
It Isn’t Tenant Friendly
Many landlords fear that their tenants will have trouble accessing and using the online rent collection site, especially their older tenants. But you may be surprised to learn that according to a 2017 article written by the Credit Union Times, approximately 56% of baby boomers and 42% of seniors pay bills online. Many online rent collection platforms are incredibly easy to navigate with an intuitive interface, making it far simpler for older tenants to pick up. A tip you might consider as a landlord is providing your tenants with a screen recording explaining how to access and use the new platform.
Accepting Online Payments is Expensive
A major concern for making the shift to online payments is the exorbitant cost of fees, but that is not necessarily the case. Paying bills online has become more and more common, so cheaper methods of payment have emerged and become more widely available. Many ACH transactions, or eChecks, have a flat fee based on the percentage of payment, so there are no surprise charges that haven’t already been agreed upon. These fees are based on a number of factors ranging from the volume of transactions to the service you decide to work with. You can shop around and request quotes to find the best service that works for you, your tenants, and your budget.
Online Rent Collection Will Deter Some Potential Renters
Online payments have become a popular choice in bill pay over the past few years, but there are still those who prefer conventional paper money transactions whether it be check or cash. This is a concern that many landlords express when it comes to making the shift to online rent collection. You can offer the option of online rent pay, and even encourage it, while still accepting traditional forms of rent payment for those who prefer to stick to cash and checks. If you accept multiple forms of payment, be sure to keep up with the records and receipts accordingly.
Increases Risk of Bounced eChecks or Credit Card Chargebacks
Like the possibility of a paper check bouncing, there is also the chance of a bounced eCheck if the tenant has insufficient funds in their bank account when rent is collected. If this is the case, you would follow the same procedure that you would for a bounced paper check. To help prevent a bounced eCheck, you can schedule email or text reminders to tenants a week in advance of rent collection so that they can ensure the funds are available in their bank accounts. Should you encounter a credit or debit card chargeback from a tenant, you can easily dispute the claim with evidence of the charge’s validity in the form of a signed lease document or an invoice.
Many landlords and modern and reputable property management companies like Utopia are utilizing online rent collection to streamline their finances and take advantage of its efficiency and convenience.