RISMEDIA, December 15, 2009—Despite significant investments by apartment firms to offer online and automated rent payment systems and growing use of the Internet to pay bills, most renters continue to deliver a rent check to their property office each month, according to a new research report by the National Multi Housing Council (NMHC).
Automated Payments: Progress and Challenges provides the results of a survey of 110 leading apartment firms about their experience in automating the payment of rent and other fees.
Just a few years ago, virtually no apartment firm accepted credit cards for rent and all rent payments took place in the property office. The industry has made great strides since then in offering automated payment methods such as online check payments, credit card payment and the scanning of checks. These options improve the customer’s experience as well as back-end processing, which reduces the owner’s costs and improves property cash flow.
Unfortunately, few renters are taking advantage of these new payment options.
Key findings of the survey include:
-74% of firms now allow renters to use a credit card to pay rent.
-Although 81% allow renters to pay rent online either via a credit card or bank transfer, only 18% of payments are made that way.
-76% of renters pay their rent with a check delivered to the office; only 12% pay via a credit card and only 10% pay via an automated bank transfer.
-Even though apartment firms can now easily scan checks for faster processing, more than two-thirds of check payments received are still manually processed.
-70% of apartment firms engage a third-party firm to provide an automated payment solution rather than developing their own system.
One obstacle to greater online rent payment is the convenience fee banks charge firms that accept credit cards. The majority of respondents (79%) pass this fee on to the resident, which can discourage credit card use.
For firms that accept credit cards for rent payment, most (64%) have a flat fee pricing schedule. Although this simplifies matters for the renter, it may not cover the apartment company’s credit card transaction costs since banks charge apartment firms a variable rate based on the size of the transaction. Eleven percent use a variable fee structure, and 4% use a tiered-fee structure.
Obstacles to Automation
In addition to limited resident adoption of automated payments, apartment firms continue to face technological obstacles. The most common problems reported include:
-Integration issues with property management software: 37%
-Hardware/scanner issues: 33%
-Accounting/reconciliation issues: 33%
Because of integration problems that persist between property management systems and automated payment solutions, 21% of firms have not integrated the two systems.
“This survey uncovered several key issues with automated payments in the apartment industry. First, most apartment residents are not taking advantage of the automated payment options. Second, apartment firms that have invested in a more streamlined or electronically based rent payment process are not getting the full benefit for two reasons: limited resident adoption and corporate problems related to technology usage and/or integration,” said David Cardwell, NMHC Vice President of Technology.
For more information, visit www.nmhc.org.