Online Rent Payments: Commercial Properties, It’s Time to Upgrade
August 23, 2017
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Why Commercial Properties Should Upgrade To Online Rent Payments
Property managers have been accepting paper checks for their commercial properties for years, but is that the optimal payment method for B2B transactions? We (and most businesses) think not. In the past twenty years, more and more small businesses – particularly those that often occupy commercial spaces – have made the push for more convenience at check out. Now they’re starting to expect that same level of service when making their own payments. Commercial property management companies, it’s time for an upgrade, and accepting online payments is the best place to start.
Why Offer Online Payments?
Offering eChecks (ACH deposits) and credit cards as available rent payment options will make it more convenient for your tenants to pay on time. In fact, according to Forbes magazine, people pay invoices 8 days sooner when they can pay electronically rather than with traditional methods like paper checks or cash. Want to get paid in a timely fashion? Offering up more payment options will improve your tenant satisfaction and get you your money faster. It’s a win-win.
You can also reduce (eliminate) processing errors by being able to track payments down to the minute. Adding a payment portal allows tenants to check their past paid invoices and see their due invoices so they can always pay on time.
Additional Reading: Accepting Rent via Paper Check: What’s it Really Cost?
Credit Cards and eChecks
The E-commerce world is growing at a rapid rate as Americans move away from traditional payment methods. In a survey conducted by TSYS, a payment processor, 1,000 Americans were asked to choose their preferred payment options between debit cards, credit cards, and cash. Would you believe that 40% of them chose credit cards while another 35% chose debit cards? That’s 75% of people saying they would prefer to pay with either option over a paper check.
What’s more, the newest generation of renters—Generation Z—almost exclusively pay bills online. Gen-Z consumers grew up with “digital-first commerce,” and recent studies on the population demonstrate this generation’s overwhelming preference for online payment options.
We are moving towards a fast-paced paperless world, and eChecks are a big step in that direction. An eCheck or ACH payment is just a debit from your tenant’s account into yours. It makes rent collection simple, and funds are usually transferred within 24-48 hours with the right processor. Credit cards are just as fast and, as previously mentioned, forty percent of Americans want to pay with them.
Additional Reading: 5 Reasons You Should Be Accepting Rent With Credit Cards
Before You Make the Switch
Now, before you jump headfirst into the E-commerce world with your commercial properties, there are a few things to consider. First and foremost, security. Make sure whichever company you plan to partner with keeps records and ensures you’re protected. Ask them if they offer things like 2048-bit encryption, SSL certification, or a two-factor authentication system. Again, you want to be protected. Another thing to investigate is pricing. Some companies look to charge a percentage of total dollars transacted. 2% might sound like a low number, but when you’re collecting $50,000 in rent, you’re looking at $1,000 fees. So shop around and find yourself a company worth trusting.
It’s time for property managers to upgrade the way they accept rent from their commercial properties. It’s time for more convenience. The demand is growing, and we don’t want you to miss out. It’s faster, more efficient, and your tenants want it. But remember, a bad partner can cause more trouble than they alleviate. Be careful when vetting your software partner!
To learn more about what makes Innago the best online payment service out there – especially for small-to-mid-sized landlords – reach out to us for a quick chat! And don’t forget to Like us on Facebook and share your thoughts in the comments.