Even before COVID-19 hit, the majority of rent payments were being made via paper check, cash, or money order.
Zego launched a research study to find out what companies with digital payment adoption rates above 65% were doing differently. The study found that there are five key strategies managers use to proactively drive digital payment adoption.
100% Digital Payments Best Practice Overview
Each of the following areas play a pivotal role in the success of your organization’s digital payment adoption rate
- On-Site Staff Training
- Resident Onboarding
- Resident Incentives
- Multiple Payment Options
- Resident Engagement & Communication
1. On-Site Staff Training
You can’t expect to install new property technology, train your staff once, and never think about it again. A periodic review of best practices is necessary to keep up with new features and updates.
Provide an on-demand training arsenal for your team
New tools and software require training. Putting your staff through two days of classroom-style instruction is not feasible in this current COVID climate. You have to get inventive with new training methods and media. Does your staff have access to on-demand trainings, webinars, links to collateral, and updates on new info when it becomes available?
Use KPIs to drive more residents to online payments
Hold your teams accountable with Key Performance Indicators (KPIs)—measurable values that demonstrate the effectiveness of your team’s efforts.
Examples of KPIs you can track:
- Boost digital payment adoption from 20% to 80% by the end of the year
- Increase portfolio-wide adoption by X%
- Increase individual property adoption by X%
- Get X amount of AutoPay sign-ups
2. Resident Onboarding
How is your site staff communicating online rent payment options to new residents? Providing education and setting expectations at the start of the lease is the most critical step to boosting your adoption rate.
Use digital communications
Digital communications have proven to be the most successful and cost-effective way to get more residents to pay their rent online. Emails, especially, are trackable and allow residents to activate their account in just a few clicks.
Take application fees online to get residents used to making online payments with you prior to them becoming a customer.
Add a payments clause to your lease or rental agreement and go over the details with each new resident. Let them know right off the bat that you do not accept cash for rent payments, but that there are digital solutions for cash payments.
In your welcome packet, include a brochure with registration instructions for your payment portal, an AutoPay enrollment form, and related promotional materials.
3. Alignment of Resident Incentives
How can you create a win-win rent collection strategy that benefits both you and your renters? Choose the right pricing model.
- Standard Passed: When residents pay rent online, they also pay the processing fees.
- Standard Incurred: The property management company pays the digital payment processing fees on behalf of their residents for one or more payment types (i.e. ACH).
- Subscription ACH: The management company will pay a small, monthly per-unit fee that includes all ACH transaction costs, no matter how many residents pay rent online. It’s a subscription model that works best for management companies with over 50% adoption.
Charge residents for paying with a paper check
As long as your residents have a free option to pay rent online, you have the power to charge a fee to those who insist on paying via paper check. The easiest way to eliminate paper checks altogether is to close off your on-site drop boxes and offer a free method to pay rent online as an alternative.
Provide an incentive to those who pay rent online via AutoPay
AutoPays are a win-win. Your residents can “set it and forget it” and you can count on digital, on-time payments each month. To encourage enrollment, run an AutoPay contest, offer a local gift card to residents who sign up, or consider incurring the first fee on the resident’s behalf.
Educate residents on the benefits of rental credit reporting
Residents who pay rent online want their positive payments reported:
- 73% of renters would be more likely to pay rent online and on-time if property managers reported their rent payments to a credit bureau.
- 67% said they would choose the rental unit with reporting already in place when given a choice between two similar properties.
- 17% of multifamily rental property executives said they report payments to credit bureaus, giving you an advantage over the other 83% if you offer this incentive.
4. Multiple Payment Options
Flexibility from a payment modality perspective includes the ability to pay rent online by eCheck, credit card, and debit card. more digital options you provide, the fewer cash, paper checks, and money orders you’ll receive. Give residents the ability to pay rent online via your community’s mobile app, or at the very least, with a representative over the phone. You should accept all major payment types including:
- Credit card
- Debit card
Convert paper to digital
Check scanners convert checks and money orders into digital transactions, eliminating the time spent transporting checks to the bank, depositing them, and manually posting them to the resident ledgers.
New: Residents Can Pay Charges with a Debit Card
The more convenient, online payment options you offer, the better. Through Zego’s integration with Rent Manager, renters now have the ability to make payments with a debit card. For many leaseholders, debit cards are their preferred payment method. Card numbers can easily be saved in a resident’s Tenant Web Access (TWA) portal for repeat payments—no more cumbersome routing or account numbers through ACH.
Debit card payments are assessed with a low, flat convenience fee. Each transaction occurs in real-time, which means there’s no delay in payment processing; property managers get full, guaranteed access to their money immediately. If there’s an issue with insufficient funds, the card will be declined.
Stop accepting cash and money orders altogether. Best-in-class payment providers will offer an alternative cash payment method for unbanked residents.
5. Resident Engagement & Communication
The way residents connect with their community has evolved. Millennials and Gen Z (who now make up over 50% of renters nationwide) have been conditioned to lose patience for clunky, slow, or outdated software.Gen Z actually prefers high-speed internet and digital features over standard amenities like parking garages, gyms, or pools.
So how can you leverage the technology you have now, and the technology of the future to improve resident satisfaction and create a sense of community?
Optimize your website
Online rent payments double when residents submit their application payment digitally. Are your application portal and payment portal easy to locate on your website? Resources like TWA allow you to personalize your online portal and provide residents with a seamless avenue to pay rent and other charges digitally. Zego’s intuitive integration with Rent Manager makes it easy to process your receivables instantly.
Schedule automatic rent reminders
Property managers can reduce late payments without lifting a finger by setting up automated rent reminders to residents in the form of monthly emails, texts, and even in-app push notifications with a tokenized link to the pay portal for each individual.
After turning on automatic rent reminders for their residents, Zego clients saw average online payment adoption jump to over 60% portfolio-wide.
As society continues to evolve, paper usage of any kind continues to plummet. News organizations, bill collectors, and personal/professional correspondence have all gone digital in an effort to meet people where they are: online
What’s your paperless payments health score?
To assist in executing this 5-step program, Zego™ offers a complimentary digital payment Health Check to examine your current strategy and consult on best practices you can incorporate to get 100% of their residents paying rent online.
Curious to see how you stack up? Take Zego’s Health Check assessment to calculate your “digital payment adoption health” score.