With the growing shift of conventional payments to Ecommerce platforms, one of the last reasons for holding a checkbook is seeing a large increase in demand from end users, home rental.
Over the last 3 years in the US, online rent payments have jumped 66.1%. According to a report by Boston-based research firm Aite Group LLC, not only has the percentage of online rent payments risen, but is now expected from most new renters. The shift from cash or check payments to online solutions has caused a drop of 13.9% in face-to-face rent settlements, and another drop of 24.9% in mail-in checks.
A poll conducted by the National Multi Housing Council in front of 14,690 home renters shows a 78% preference for online rent payment, as opposed to having to deal with their landlord in person, or dealing with their building management office. With the increase in demand, more companies are providing payment platforms to accommodate rent payments. California based YapStone Inc. is one of those providers.
According to YapStone Inc. CEO Matt Golis, the ability to pay online is no longer a luxury, or convenience feature, rather “It has become a necessity.” Golis gave student housing residents as an example of a demographic which has never written a check. Millennialas and generation-Yers have either rarely or never written a check before, and if they are currently not renting, most likely do not own a checkbook at all. Online rent payment for these demographics is ideal.
When we posted on another company that has taken to eliminating the rent check, RentMoola, one of the main concerns was fees. With the slim margins that rent payments bring in, deciding whether the landlord or the tenant takes the fee upon themselves is still undecided. RentMoola’s approach has the tenant take the fee, while building a points-reward system, and charging it as a convenience fee.
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“There has been an ongoing discussion surrounding that with the industry and the credit card companies, and they are still trying to work out a solution.” Rick Haughey, vice president of industry technology initiatives for the National Multi Housing Council stated on fee calculation.
With the ever-growing shift to Ecommerce and online payments, we should expect more internet specific solutions to be offered in the future, like Dwolla Credit, that offer online lines of credit with little to no fees associated to it. While there are still some wrinkles to iron-out in the concept, online rent payments should become more common not only in the US but around the world.
Image courtesy of Wikimedia