There are multiple advantages of offering tenants an online rent payment solution. While one can drastically decrease the administrative costs and time, online rent payment systems can also reduce the payment errors that usually happen during rent collection. Moreover, with such a system in place, property managers can perform better without worrying about collecting rents. All they need to do is coordinate with the tenants to make payments. Even for tenants, option of online payments is convenient as one can pay rent without needing to step out of the home.
There are different modes of online payment options property managers can choose from and implement them in their property management systems according to the convenience. These options include
• Automatic Transfer of Funds - Also termed as automatic electronic funds transfer or recurring debit payments, this is one of the foremost online payment options that can be made available by property managers with ease. In this method, funds get debited from the tenant's checking/credit account automatically on a fixed date of every month. In right terms, this option cannot be categorized under online rent payment systems. However, it does offer certain advantages.By allowing an automatic transfer of funds option, tenants no longer have to worry about forgetting rent payment.
Secondly, the option does not cost much. There are also quite a few disadvantages of recurring debit. Foremost, the tenants have to forego the control exercised on their checking accounts. Secondly, this system allows only fixed withdrawals every time. However, the amount tenant has to pay might vary when it rent also involves utility billing. Keeping track of the balances and running after tenants to have the dues cleared can be problematic for property managers. In such situations, recurring debit might not be a right solution for both the property managers and for the tenants.
• Credit/debit card payments- With the advent of advanced technological applications such as internet and e-commerce, the usage of credit and debit cards for purchasing goods on the internet has increased tremendously over the last couple of years. Interestingly credit/debit cards can be used for paying rents. Unlike recurring debit option, credit/debit card payment is a dynamic withdrawal system, particularly beneficial in situations where rent amounts vary each month.
One of the disadvantages of paying through credit cards is that the option is a bit expensive as credit card companies charge a certain fee for every online transaction made by the customer. These charges are usually 2-3% of the transaction amount. Secondly, property managers do have to face the risk chargebacks in case of any fraudulent transactions from the residents.
• Resident-initiated fund transfer - This is the most convenient option for both the tenants and the property managers, usually using a property management software. In this online payment option, the tenant can sign up into the secure payment gateway provided on the community's website, enter his/her checking account details, type in the payment amount and other details and click on the submit button. There is another alternative in a resident-initiated fund transfer. In this, the resident can sign-up into his online checking account, submit the payment details of the property manager including the checking account number and name, enter the payment amount, specify the date on which payment has to be made and click on submit.
On the specified date, specified amount of money would be debited from the resident's account and deposited into the checking account of the property manager. Advantage of this system is that the resident does exercise complete control on the checking account, payment amount, and the date on which rent has to be paid. Secondly, this is a low cost option, is flexible, and allows payments to be made from anywhere and anytime. Even the funds are delivered without much delay.
Sarah_Rockler
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