In an era where identity theft runs rampant, finding tenants who have the financial means to pay their rent in a timely and consistent manner based on their lease agreement is only half the battle. Here are four safe ways to collect rent from your tenants.
Electronic transfers. If your tenant has a checking or savings account, she likely has the ability to establish a recurring monthly electronic transfer (often called an ACH transfer) directly to your property management company’s bank account. Not only does this form of payment reduce the odds that your tenant’s check (and the sensitive information it contains) gets lost in “snail mail,” it ensures that sensitive information associated with both of your accounts is kept secure during transaction processing.
Because electronic transfers also allow the tenant to select a date that the funds will transfer each month, ACH transfers empower you to proactively respond and resolve a potential late payment issue when rent hasn’t arrived as expected, whether due to a processing error or insufficient funds in the tenant’s account.
Mobile payments. If you’re among the two-thirds of Americans who own a mobile device like a smartphone or tablet according to PewResearch data, you already own the equipment you need to accept rent using mobile payments. Simply establish a merchant account with the mobile payment processor that best meets your needs, given the provider’s fee structure (which typically ranges from 1 to 3 percent based on the transaction amount and type), compared to your needs. Confirm that any mobile payment processor you consider guarantees payment card industry (PCI) compliance during the transaction process. This will ensure that your customer’s sensitive payment data is kept secure, and limits your property management business’s liability associated with handling customer payment data.
Once your mobile payment account is approved, you can accept your tenant’s rent payment via credit card or debit card from anywhere (including in person or over the phone), using your mobile device. Many mobile payment providers allow the option to process payment using a dongle (small device that plugs into the headphone jack of your smartphone or tablet to swipe a card), or by manually entering the customer’s card information into the payment provider’s secure app. Once payment is complete, your tenants also have the option to receive a receipt by email or text. Once approved, funds are typically transferred to your bank account electronically (less mobile payment processing fees), within 72 hours.
Web-based payments. If your property management has a website, you can easily equip it to accept secure Web-based payments with a payment gateway. Whether you incorporate a sophisticated customer payment portal that tracks customer payment history on an account-specific basis, or a basic shopping cart-style interface, secure Web-based payment gateways give tenants the flexibility to choose the form of payment they prefer to use (including debit or credit card), and to pay rent at their convenience. Some mobile payment processors also allow merchants to establish Web-based payments using their mobile payment merchant account to make establishing Web-based payment as simple as cutting and pasting a bit of provided HTML code into your site.
Online bill payment. Most financial institutions now offer customers the ability to eliminate the need to write a paper check by using online bill payments. Once the customer initiates the payment, the financial institution sends a paper “check” to the designated merchant on the customer’s behalf. Though online bill payments do not eliminate your need as the rent recipient to take the customer’s check to the bank to deposit funds, it does provide you the peace of mind that a tenant’s check is backed by sufficient funds.
There are several payment methods your property management company can benefit from that can improve customer experience, and simplify the time, costs and resources you must dedicate to collecting monthly rent. Whether you choose newer technologies like mobile payments or paper-based systems like online bill pay, these cost-efficient methods can improve your cash flow and reduce risk.
Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing firm. She has more than 20 years experience in the bankcard industry in direct sales, marketing and sales management. Follow her on Twitter.