It’s a brave new world when it comes to rent payments, with 53 percent of all apartment residents now under the age of 30, said a panel of experts during a session at the 2015 NMHC OPTECH Conference & Exposition.
“Out of 50 million millennials, 85 percent have a mobile phone,” said Bernie Avondet, senior vice president of KeyBank. “They check their phones 150 times a day. Everything is through the phone. So why not rental payments too?”
Research shows nearly 80 percent of people prefer electronic payments, but 58 percent don’t want to pay a convenience fee. Approximately 22 percent prefer paying at the front office.
Demand is mounting for electronic payments, but multifamily housing firms have been notoriously slow to adopt new ways to collect rent payments. Indeed, the old-fashioned, paper check is still the default payment method at many apartment communities.
And perhaps with good reason. Net Operating Income (NOI) can really be impacted by payment choice.
But while many firms have balked at electronic payments because of the fees some electronic payment services charge, many also underestimate the resources that go into managing the paper trail.
“The time and energy it takes someone to take the checks in and manually input the information into accounting software” can be significant, said Avondet. However, he emphasized that doing a cost/benefit analysis is helpful because it’s not easy to determine what’s best for a particular company based on staffing and technology capabilities.
Moving forward, fee structures could also change. “The best case scenario for payments in the future, and easiest to comply with, is to not have any fees,” said Sam Bayoumi, senior account executive with Visa. “And, ultimately, we also want to give more payment options.”
Regardless, picking a provider partner can be challenging. Apartment executives need to ask about the integration process and what manual input may still be necessary, as well as the online versus mobile experience.
Security is also a concern. “Mobile is growing faster than desktop and a lot of the innovation is around making it easier to use cards. But with that, you also have to make sure that security is addressed,” he added. “Consumers are worried about the money coming out of their account when using a debit card. Banks have done a good job marketing these concerns from consumers and letting them know about the zero liability, but still concerns exist.”