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Rethinking Online Convenience Fees

Online payment systems have quickly become a mainstay in 21st century life. Few of us make it to the bank or the post office to ever pay a bill. For tenants and landlords alike, online payment systems make life easier. Who wants to chase down a tenant for a rent check when you can just remind them to pay their balance right from their phone? Unfortunately, though, there are downsides to this convenience: the fees. No matter what payment management system you use for your community, Scott Safadi of Cal Bay Property Management says that there are expensive fees that could turn off prospective tenants. They may also be a "last straw" factor motivating unhappy tenants to move out.

 

Unfortunately, there are some fees that are impossible to get around. Rules set by the credit card companies make it difficult to circumvent even the smallest of fees. While not all communities accept VISA payments for rent, those that do will need to abide by the rules set forth by the company.

 

There are pros and cons to any payment system you might use, but before you chalk convenience fees up to a necessary evil, consider the impact they are having on usage. The entire point of an online payment system is to make life easier for you and your tenants. If convenience fees drives tenants away from the online portal, it may not be worth keeping around.

 

Most people resent having to pay a fee in order to take care of their monthly rent payment. The solution? Accept only ACH payments, which draw from a tenant's bank account instead of from a credit card. These payments are often free to process, cutting out the possibility of expensive fees. The only drawback? Tenants don't have the freedom to choose how they would like to pay; they may only draw from their bank account, not from their debit or credit cards.

 

Another option to circumvent fees and encourage timely payments from tenants is a recurring ACH model. This system may require a one-time payment to set up the initial account, but once a tenant opts into the recurring rent payments, there will be no additional charges.

 

No matter how you decide to move forward, be sure to consider the impact even minor convenience fees have on your tenants.

 

- Scott Safadi, Cal Bay Property Management

Online payment systems have quickly become a mainstay in 21st century life. Few of us make it to the bank or the post office to ever pay a bill. For tenants and landlords alike, online payment systems make life easier. Who wants to chase down a tenant for a rent check when you can just remind them to pay their balance right from their phone? Unfortunately, though, there are downsides to this convenience: the fees. No matter what payment management system you use for your community, Scott Safadi of Cal Bay Property Management says that there are expensive fees that could turn off prospective tenants. They may also be a "last straw" factor motivating unhappy tenants to move out.

Unfortunately, there are some fees that are impossible to get around. Rules set by the credit card companies make it difficult to circumvent even the smallest of fees. While not all communities accept VISA payments for rent, those that do will need to abide by the rules set forth by the company.

There are pros and cons to any payment system you might use, but before you chalk convenience fees up to a necessary evil, consider the impact they are having on usage. The entire point of an online payment system is to make life easier for you and your tenants. If convenience fees drives tenants away from the online portal, it may not be worth keeping around.

Most people resent having to pay a fee in order to take care of their monthly rent payment. The solution? Accept only ACH payments, which draw from a tenant's bank account instead of from a credit card. These payments are often free to process, cutting out the possibility of expensive fees. The only drawback? Tenants don't have the freedom to choose how they would like to pay; they may only draw from their bank account, not from their debit or credit cards.

Another option to circumvent fees and encourage timely payments from tenants is a recurring ACH model. This system may require a one-time payment to set up the initial account, but once a tenant opts into the recurring rent payments, there will be no additional charges.

No matter how you decide to move forward, be sure to consider the impact even minor convenience fees have on your tenants.

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