Eliminating the Cost and Confusion of Online Payments
The multifamily housing industry and residents have embraced online payments as a fast, convenient method for paying rent. Property managers enjoy hassle-free online payment verification and the elimination of paper transaction headaches. Residents enjoy the convenience of online transactions and flexibility in managing finances via multiple payment options.
The Convenience of Online Payments
Traditionally, the convenience of online payments came with a downside for property managers: transaction fees and associated processing expenses. The fees, which can cost the merchant as much as 3.5 percent for credit card transactions, add up across an apartment community or portfolio, especially with current average monthly rents over $1,200.
In addition, laws associated with credit card service charges and convenience fees vary by state and can be confusing to merchants. Some states have statutory prohibitions on surcharging/convenience fees to credit card users, which leaves the property management company or merchant no choice but to absorb them.
Eliminating the hassle and confusion of managing payment processing
Working with an accredited payment services provider that eliminates the headaches and credit card transaction expenses is like giving the multifamily industry its cake and eating it, too, says Jeremy Ford, Industry Principal at RealPage, Inc. Bring on the forks and paper plates.
ResidentDirect, offered by RealPage Payment Services (RPPS) is a unique online payment solution that shifts payment transaction costs directly to the resident and enables the property to net the entire rent amount. Instead of the property manager paying up to 3.5% of the transaction amount to credit card companies each month, the resident is charged a clearly disclosed money transmission fee during the payment authorization process. As a result, risks associated with convenience fees are eliminated, payment processing costs are erased, and property manager underwriting roadblocks are removed.
“All the hassle and confusion of managing resident payment processing is eliminated,” Ford says.
ResidentDirect changes dynamics of receiving online payments
RPPS is a licensed money services business registered with the U.S. Department of the Treasury and state banking regulators in nearly all states. Before offering the ResidentDirect solution, RealPage completed a tedious credentialing process that included product operational reviews, posting bonds, funding cash reserves, implementing money laundering detection systems and OFAC screening, and passed the banking controls and financial audits to operate as a non-bank financial institution.
Ford believes RPPS considerably changes the dynamic of receiving online payments. The service helps protect property management companies while navigating the complex world of payment transaction processing. Gone are worries of compliance with varying state laws and regulations associated with collecting service fees. It’s a particular benefit to property management companies that have properties in several U.S. locations.
“There are different providers that offer payment options,” he said. “All offer payments and a way of doing it based on convenience fees. ResidentDirect offers a solution that is legal and compliant even in states where they have laws prohibiting the charge of convenience fees or surcharges.”
Another way of meeting today’s resident demand for convenience
The solution is also a way for properties to meet resident expectations for online payment convenience and flexibility without incurring additional expenses associated with credit cards. According to RealPage, about 12 percent of apartment residents pay monthly rent with a credit card. A recent National Multifamily Housing Council survey notes that 78 percent of renters prefer to make payments online.
RPPS allows residents to pay rent and other fees via debit card, credit card, and ACH through RealPage’s resident portal. Residents receive a bill, authorize the desired payment method, and a transmission fee is paid directly to RPPS by the resident as part of the transaction.
Eliminated are the end-of-the-month checks and balances of verifying and paying service charges billed by the merchant account provider or credit card company.
“It’s a more cost-efficient way for apartments to provide the conveniences associated with online payments,” Ford says. “Anytime you can relieve costs and confusion of some transactions, that’s a bonus.”