A discussion on rules and compliance is likely to conjure two reactions in people – the anticipation of getting a root canal mixed with the frustration from the hassle of meeting the requirements.  Most people don’t appreciate being told how to run their businesses but when you are handling credit/debit cards there are requirements for processing payments.  The payment industry has evolved significantly from both a technological perspective (fraud and security breaches with card-present retail processing, chip-based solutions on cards themselves to prevent fraud) as well as a business perspective (Visa and MasterCard becoming publicly-traded entities and the financial regulation changes happening right now).  This has expanded the requirements that all merchants that accept credit/debit cards must examine to insure proper card acceptance.  In the apartment/multifamily industry, there are two areas that property management firms need to understand to not risk penalties or exposure to fines: PCI compliance and convenience fee regulations (when applicable).

PCI compliance defines the specific security standards to protect card information during and after a transaction.  It is a rigorous yearly audit that any entity that processes, transmits, or stores cardholder information must complete each year at a cost of up to $50,000 annually.   Many multifamily firms are using either a 3^rd party processor, virtual terminal, or accounting software to collect and store cardholder data (since rent is a monthly transaction the property wants to have the renter’s card available for subsequent processing after the first transaction).  The 3^rd party processor and virtual terminal provider ALWAYS needs to have completed a PCI audit in order to be in good standing with the card associations.  Software companies are required to also have completed a PCI audit if the user is keying the card data directly in the property management software then the software company must be PCI compliant as well.  When considering a payment processing partner, it is critical that the company is current with PCI compliance (if their name is not on the list on Visa’s official website of PCI-complaint providers then they are NOT PCI compliant) – here is the link:

http://usa.visa.com/download/merchants/cisp-list-of-pcidss-compliant-service-providers.pdf

Convenience fee regulations are specific rules for how a fee can be assessed to a cardholder for accepting payments in an alternative channel (like online or by phone).   In most industries, merchant acceptance does not involve convenience fees being charged to the cardholder since the merchant would lose sales if they charged a fee to consumers paying by debit/credit card (not to mention that it is not allowed in a card-present/face-to-face environment).  The multifamily industry is moving away from convenience fees being charged to the renter as card acceptance that is fee-free to the renter is becoming a great way to close new leases, boost on-time payments, and be an amenity that renters actually want.  For those property management firms that still have a convenience fee component, it is critical to understand card-specific requirements like:

• Convenience fee must be a flat amount (like $9.95) and not a percentage-based fee (Visa card requirement)
• All payment options in that channel must have the same convenience fee (Visa and MasterCard requirement)
• Convenience fees are not permitted on recurring rent transactions (AutoPay Payments) (Visa requirement)

There are payment industry vendors that fly under the radar by not completing the PCI audit (they do not appear on the Visa PCI compliance list) and by violating fundamental convenience fee regulations.  Whether you collect thousands or millions of dollars in rent, it is imperative that you verify that your payment vendor is PCI complaint and meets the convenience fee regulations listed above.  It is simply not worth the obvious risk and financial loss when it is discovered and reported to the card companies.

Matt Golis – CEO and Founder, RentPayment (a YapStone company)

When it comes to rent collection, most Property Management staff only focus only on the bare minimum: on time rent payments and late fee billing.  The most comonly overlooked issue concerning rent collection is security.   When collecting rent, you should always rememeber that residents are putting their personal information and financial livelihood in your hands.   If rent money or banking information is compromised due to poor security and operation policies, you put your residents and your community in danger.   Stay informed and educated on the procedures of collecting rent securely.

Rent Drop Box Danger: Even the safest community can have fraud or theft issues arise from unsecure rent drop boxes.   In a recent discussion forum on Multifamily Insiders managers discuss ways to make drop boxes more secure, suggesting angled chutes, certain distance from door ratios to prevent the always present issue of check theft.   However, the truth is, no external drop box is completely safe.

A Secure Solution for Rent Collection: A solution to security issues when collecting rent is to implement and promote a secure and compliant electronic payment option at your community.  Many of the renters who use the drop box likely do so because they need to pay rent after office hours or to avoid late fees. But with online payments, renters can pay any time. This may be a more convenient option for renters (since they won’t have to write a check and walk to the office drop box) and it is certainly a safer option.

Electronic payments also eliminate risk from human error.  You never know when a check can accidentally be misplaced or a paper record can some how be leaked.  In addition, it can also be risky when you’re exposing renter’s bank account numbers to multiple staff members at the property or a drop box thief.  With online solutions like RentPayment, all credit card and eCheck data is locked and stored as tokens (a security measure called tokenization),  plus only partial account numbers and credit card numbers are viewable to property staff.   In addition, electronic rent collection doesn’t have to mean only online.   With RentPayment, transactions can also be made by phone, or with AutoPay;  giving renters multiple options to pay rent safely.

For many of us (Generation X and older) the personal check as a payment method is something we grew up in managing our finances (“balancing our checkbook”). Despite the convenience of managing our finances online between bill payment (direct biller websites and online bank bill pay services) and personal finance tools (like Mint.com) checks are still necessary for most charitable contributions or paying for maintenance work at our primary residence (mowing, snow shoveling, pest control). In addition, there are those few renters that still haven’t signed up for RentPayment that may be living in the dark ages of paying their rent with a check as well.

In contrast, Generation Y who represents the greatest influx of new renters (particularly when unemployment goes down and they FINALLY move out of their parents’ house) has probably never owned, let alone carried a checkbook. That means that minus a special trip to 7 Eleven or the post office for a money order, the fastest-growing demographic of renters will not have a way to pay rent unless properties embrace electronic payments. The necessity of offering renters the ability to pay by mobile technology (RentByText, iPhone app, mobile-optimized version of payment screens) is driven by the way they communicate in their day-to-day lives. In addition, renters who have paid with a credit card or E-check in the past are shifting to using mobile devices and away from a desktop computer connected to the Internet.

Electronic payment acceptance is no longer a differentiating amenity for property management firms. Mobile payment options for rent and communicating with renters by text and email received on smartphones is the future for properties to efficiently collect rent and minimize delinquencies.
-Matt Golis – CEO and Founder, RentPayment (a YapStone company)

Recently, the information services company Experian most popularly known for their credit reporting agency, announced that it will be including rental data in the credit filings to be included in their score evaluations. With nearly 96 million renters in the US, reporting rental payments will be huge opportunity to improve and build credit for millions of college students, low credit or unbanked populations.

While this will also be a big opportunity to improve credit ratings it can also have the reverse effect. Hence, it has never been more important to pay rent on time. But not to worry, with companies like RentPayment, on time payments are easy. Renters should take advantage of AutoPay payments, where you can set the recurring transaction in advance. Or utilize rental reminder emails or text messages.

For more information on the credit reporting of renter data click here.

This year a select group of Americans will get their tax return in the form of a pre-paid debit card. This pilot program is being launched by the US Treasury Department to cut the expense of paper checks and also aid the “unbanked population” that do not have bank checking accounts to receive refunds. This recent news article supports the fact that electronic transactions via credit and debit card are easy, efficient and will soon become the standard for payment transactions in our society.

It is also clear that the paper check is becoming antiquated quickly. With online bill pay, payroll direct deposit, and electronic rent payment services (such as www.rentpayment.com), both consumers and businesses are using paper checks less and less. This group now includes the United States Government!

Internet purchases, payroll, and now tax refunds are all making use of electronic payments, but what about person to person transactions? Most people still use cash and checks for interpersonal payments such as gifts, yard sales, friendly loans etc… However, trends indicate that there will a time when all these transactions will be electronic as well. One company leading this revolution is Square (www.squareup.com). Square “enables anyone to accept credit cards anywhere” by using a mini credit card swiper that plugs into a cell phone or an iPad. This enables person to person transactions, and is also an excellent solution for small businesses.

Think about how many checks you wrote 5-10 years ago, and how many you write today. I’m willing to wager that this number has dropped significantly. As the tail-end of generation Y become adults, familiarity with the internet and electronic transactions is more and more prevalent. In addition, much of this generation does not own a checkbook. It is undeniable that electronic payments are the future!

Check out this article posted by The Wall Street Journal:
WASHINGTON—The U.S. Treasury Department plans to launch a pilot program Thursday to deliver tax refunds through prepaid debit cards, an effort to cut the expense of paper checks and aid lower-income taxpayers who don’t have bank accounts.
About 600,000 low- and moderate-income taxpayers nationwide, a slice of those earning about $35,000 or less annually, will receive letters inviting them to activate a debit card that can receive direct deposits.

The Treasury Department’s new program will deliver some tax refunds on prepaid debit cards, giving recipients an alternative to check-cashing outlets.
The program will cost the government about $1.5 million and marks the latest federal effort to send fewer payments by mail. The U.S. still issues an estimated 45 million paper checks a year for tax refunds. Each one costs the government about $1, including the cost of processing roughly 600,000 claims a year for missing checks. Each payment by direct deposit costs the U.S. about 10 cents.
“My goal, one that’s been talked about for many years, is to get out of the check-payment business,” said Richard Gregg, Treasury’s Fiscal Assistant Secretary and one of the officials overseeing the program.

At the same time, officials across government have been exploring how to nudge consumers who don’t have bank accounts toward lower-cost financial-services providers. An estimated nine million households—about one in every 12—don’t have bank accounts, according to a Federal Deposit Insurance Corp. survey……. >>> View the full article

In the 5 month promotional period, the RentPayment Sweepstakes had:

• close to 1,000,000 entries
• over 300,000 eligible renters!
• 1,000 loyal renters who made a payment each month

How do you get this kind of response without advertising?  You let your renters speak for you!

To help spread the word about the Sweepstakes, we relied heavily on the voice of our renters.   Very little communication went out directly to residents from RentPayment, but rather, we provided residents with the tools to share the sweepstakes amongst each other virally through email and social media.  Through our website, web banner reminders were placed. Also, Property Manger resources were sent out via email so they were able to get the ball rolling for their renters.

Besides seeing the power of social media sharing and renter communication first hand, we were also able to learn more about which channels our renters are using and which are the best marketing vehicles to communicate with residents in the multifamily industry.

Residents were able to share the Sweepstakes through Email, Facebook, Twitter, and MySpace with neighbors, roommates and friends.  The chart above shows the percentage of “shares” (emails, messages, status updates or tweets) that were sent among various channels. The highest percentage of shares via email (about 2,000 emails) proves that email is still an extremely powerful marketing tool for communication with renters.  As expected, I’d like to point out that Facebook is the most popular of the social networking sites among our renters for sharing information.

Property Managers should take advantage of this communication channel for prospecting, operational efficiencies and to distribute promotional offers (like the RentPayment Sweepstakes!) to build renter satisfaction.

We also looked at the ability of these four social channels to actually draw traffic our site.    These results show that as a communication tool email had the greatest call-to-action, accounting for 98% of the total website traffic from all sources combined.  Out of the three pure social networking sites, Facebook generated 91% of the total traffic and Twitter generated the other 9% showing that Facebook sharing the most valuable traffic source, and MySpace sharing has next to no value.

More about the Sweepstakes:  To be entered, renters of participating properties just needed to pay their rent through RentPayment!  Renters could pay online at RentPayment.com or pay rent by the phone with RentPayment’s many mobile payment options.    RentPayment’s mobile payment options include:  Paying rent over the phone, RentByText, and RentPayment’s new iPhone app- RentPayment Mobile.  For more info, visit: http://blog.rentpayment.com/2010/08/05/sweepstakes/.  To meet our $10,000 Grand Prize winner, visit: http://blog.rentpayment.com/2011/01/28/watch-the-video-rentpayment-awards-10000-sweepstakes-grand-prize-winner/.

After months in development, the RentPayment Mobile iPhone application is here! The iPhone application is available for FREE to any renter with an iPhone, iPod touch, or iPad and allows renters who reside at any RentPayment community to:

• Set up a new account with RentPayment
• Login to an existing account
• Make a payment on-the-go using a credit card or eCheck
• View Payment History
• Setup AutoPayment

Just like with online payments, the RentPayment iPhone app is 100% secure, ensuring that all renter credit card data and personal information is safe. Please let your renters know this application is available for November rent and remind them that they have another flexible option for paying electronically.

View in iTunes App Store

Test the application out yourself to see first hand it’s features and functionality. Please also feel free to rate the application and leave your comments!To download the app on your iPhone, iPad, or iPod touch, just search “RentPayment” in the iTunes app store. Or, to download from the app store online: Click here.

RentPayment: The leader in mobile payments
RentPayment is truly the industry leader in mobile payments for today’s on-the-go renter. Our flexible payment options are not only appreciated by tech savvy renters but also by those who can be forgetful about paying rent and prefer recurring payments.

In addition, RentPayment is the only rent collection service with a channel to accept apartment payments via text message through RentByText™. RentPayment also allows renters to pay rent by phone using both IVR and live Client Care Representatives 24/7. In addition, the upcoming RentPayment iPhone application will provide yet another option to paying rent over the phone! RentPayment clients should use these amenities as leasing tools for apartment rentals, because you’re supplying and amenity your renters want!

The August issue of Units Magazine provided a list of reasons detailing why missing rent payments can be a risky habit. A few of the reasons mentioned include: 

• A paper trail of poor rental history
• Possible eviction from community
• Negative impact on your credit score resulting in:
  • future rental application issues
  • trouble gaining employment
  • denial of future mortgage, automobile or student loans

At RentPayment we believe our services benefit renters and help stem the risks associated with late payments.  We focus on providing a simple, easy way for renters to pay their rent – either online, via text message or over the phone (with an agent).  One of major advantages of our services is assuring that your rent is paid every month on time, no matter what.  

When rent is paid using RentPayment, everybody wins. The property manager is assured they will receive rent monies on time and renters can rest easy knowing their rent has been paid – and they didn’t even have to walk to the manager’s office to drop off their check!  

It’s a seemingly easy task to pay your rent on time, but one that is often put on the bottom of a “to do” list. When rent isn’t paid on time, it turns into an unnecessary hassle for renters and property managers alike. For renters that are continuously late in paying their rent, late fees start stacking up and their credit starts to dwindle. For property managers, late payments mean they must chase down renters and potentially begin the collections/evictions process. 

Missing rent payments is a risky habit for renters to get into, especially when the consequences of missing payments can be so long lasting and far reaching.  Furthermore, there are services available that will ‘remember’ to pay your rent for you! These services even allow you to pay your rent when you’re on vacation and can’t get to the rental office to deliver a check. There’s no reason to suffer from the effects of missing rent payments with the services available today. 

So, the question of the day is: why do renters take on the risk associated with paying their rent late? Is it because they don’t think their late payments will truly affect their credit or is it because they just don’t know there are E-payment options out there to help them remember? 

This post is open for discussion, please share your thoughts!

“Going green,” seems to be the current trend for consumers and business owners to claim they are following. Despite the obvious perks for adopting more nature-friendly practices, many have their doubts of whether or not the costs of applying these practices outweigh the benefits. However, by switching to a paperless ePayment system you can dramatically cut down your carbon footprint while also increasing efficiency and convenience for your company.

Javelin Strategy and Research reported that if every American household viewed and paid bills online, solid waste could be reduced in U.S. landfills by more than 800,000 tons a year and save an estimated 18.5 million trees a year. According to The Federal Reserve, over 170 million pounds of greenhouse gases are used on printing checks and bills each year.  Take a moment to think about how each document not only uses the paper it was printed on but also the gas consumed by the mail carriers to deliver it to you and your renters.

Reducing the use of paper provides benefits beyond saving the environment when using a full service ePayment solution to keep track of all your books and payment history.  Without the endless amounts of paper books and bills adding up, you can save thousands of pieces of paper as well as increase your property’s efficiency and accuracy.  Online payment systems increase accuracy by reducing the risk of human error involved with manual entry and recordkeeping.

Offering ePayment services also saves your business money and time. Electronic payment lowers costs for businesses who spend money on postage and check processing. For example, according to RentPayment.com, an eCheck costs approximately $1 to process whereas a paper-check can cost anywhere from $6 to $12 to process. In addition, the processing time for an eCheck is only a few days whereas a paper check can take up to 2 weeks to clear. The American Forest and Paper Association reports that every ton of paper costs an office roughly $1000 and can add 3.3 cubic yards of waste to a landfill.

Paperless billing is catching on as consumers become more aware of the conveniences and environmental benefits of electronic billing and payment. Surveys have shown that users not only like helping the environment, but they also like the timeliness and practicality of ePayment. Renters enjoy the assurance of securing an always on time rent payment every month without having to worry about physically dropping off a check.  Debit and credit cards are also processed by these same services. This is another benefit for the renter and helps ensure they can always make their rent payment. Renters also avoid being charged late fees while the property managers enjoy the guarantee of receiving rent every month with an automated withdrawal from bank accounts.

The Nature Conservancy sites that half of the world’s original forests are gone and each year 36 million more acres of deforestation are added to that list.  In one 24 hour period, one tree can provide oxygen for up to four people and discharge up to 100 gallons of water from the ground into the air. It’s critical that we preserve our trees to maintain our planet’s livelihood.

“Obviously, businesses and consumers won’t ever stop needing paper, but technology is helping make an impact to reduce unnecessary paper usage and waste. Electronic bill payment is a key element in that quest,” said Kevin Sander, director of corporate partnerships at the National Arbor Day Foundation

Finally, there is a way to save your property from superfluous costs and decrease unnecessary stress for you and your renters while also giving Mother Nature a much needed break too. It’s a win-win situation. Let’s all do our best to save the environment while saving our businesses money by switching to ePayment services today.

About Author:
Krista Norsworthy is a recent print journalism graduate from the Walter Cronkite School at Arizona State University and currently working as marketing intern at RentPayment.com in San Francisco.