5 Reasons You Should Be Accepting Rent With Credit Cards
April 13, 2017
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Why You Should Start Accepting Rent With Credit Cards
eCommerce is a well-established industry in 2023. Merchants and consumers love the convenience of online shopping, and that convenience shouldn’t stop at retail. Here’s five reasons you, a landlord, should think about offering online credit card payments too.
1. Convenience for your tenants
A rental payment is a monthly deduction from your tenant’s bank account. It’s impossible to make it pleasant, so it’s important to make it as convenient as possible. And checks are not convenient. The number of Google searches of “how to write a check” has increased by more than 5x over the last 10 years. And what’s more, most banks charge anywhere from $10-20 for a box of personal checks – so simply acquiring an inconvenient means of spending money costs money. And if they’re mailing the rental check in, they now need to account for stamps, envelopes, and time.
More convenience means more tenant satisfaction and more on-time payments, and that’s always better for you.
2. Credit Cards are quick and guaranteed.
When a tenant makes a credit card payment, the processor typically deposits funds into your account within a few business days (Innago deposits within 24 hours). What’s more, a credit card payment is almost fully guaranteed. You don’t have to worry about bounced checks or chasing down money.
You might wonder whether credit card chargebacks will become a problem if you allow credit payments. A chargeback is a type of dispute a consumer can make if they see charges on their card that they believe to be erroneous. Thankfully, landlords have many ways to combat chargebacks: Keeping detailed transaction records, being clear about any fees, and requiring signatures. Because there’s a lease agreement in place, the risk of a dispute is substantially mitigated (if you’re interested in this, be sure to ask us about our guaranteed rent collection system).
3. Perception is important
Your tenants are your best marketing tool. If they’re renting from you, odds are high that they fall in a demographic that’s a good fit for your properties. Tenants talk – to their friends, to each other, and nowadays, online. You may not have directly “lost a tenant” because you don’t yet offer credit card payments, but your tenants’ opinion of you matters. If they think it’s convenient or inconvenient to pay rent monthly, they’re going to voice that opinion and it can encourage or discourage other potential tenants.
4. Keep up with the Joneses
This one is all about perception too. A 2020 study revealed that at least 55% of consumer payments are made with credit or debit cards (27% and 28%, respectively). And with eCommerce growing at a rate around 15% year-over-year, the number of tenants interested in paying rent online is exploding. Chances are the apartment complex down the street is already offering credit card payments. And if they’re not, they will be soon. Take advantage of the opportunity to get a leg up and position yourself as the technology leader in the area.
5. Online payments simplify bookkeeping
Online payments in general make accounting an incredibly painless process (practically an oxymoron, right?). Transaction data is automatically uploaded and displayed into an online portal, so you can see who paid, how they paid, and when they paid. Reminder emails that allow your tenants to submit rent with the click of a button help them avoid late fees and you receive your money on-time.
We stopped at five reasons because it’s a nice, clean number, but there are hundreds of others. Credit cards are a huge part of online sales and if you’re not already offering them, you should be.
To learn more about what makes Innago the best credit card service out there – especially for small-to-mid-sized landlords – be on the lookout for an upcoming article, or, reach out to us directly for a quick chat!
3 thoughts on “5 Reasons You Should Be Accepting Rent With Credit Cards”
Many of my tenants have voiced that they would like the option of paying their rent online. With that being said, I do have some older tenants that I feel would not like paying online and see it as “too challenging.” How do you recommend I bridge this gap so that everyone is satisfied and I can remain competitive?
That’s a great question. You want to offer convenience to your tenants, not new challenges. Find a service that allows you to mark offline payments, like checks and cash. Innago does, so you can easily have online payments next to offline payments – everyone’s happy!
Is there a way yo block digital payments from a tenant during the eviction process?