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Electronic rent payment pricing models explained

How you structure your electronic rent payment pricing model is the biggest influencer of online payment adoption.

Electronic rent payment processing fees can be a tough pill for residents to swallow. Especially when there are peer-to-peer payment apps like Venmo that are free to use. Creating a positive resident experience has become a major focus in the industry. So it’s important to implement a digital rent payment structure that mutually benefits you, your staff, and your renters.


The 2024 Rent Payment Trends Report

Learn the most effective methods to increase digital rent payment usage amongst your residents with our 2024 Rent Payment Trends Report. Based on research into our user data, this free report details the top 5 data-backed ways management companies are digitizing their rent collection cycles.

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Step 1. Choose the right electronic rent payment pricing model

The pricing model you set up with your provider has a direct effect on digital rent payment adoption. Leading management companies are finding a pricing model ‘sweet spot’ that incentivizes residents. But also reduces operating expenses and increases portfolio value.

There are a few alternatives and considerations when it comes to pricing models. The chart below outlines three different types, their benefits, and their average digital rent payment adoption rates.

This chart outlines three electronic rent payment pricing models as well as their benefits and their average digital rent payment adoption rates.

#1: Standard Passed

Residents pay the digital rent payment processing fees.


  • Traditionally, this has been an effective electronic rent pricing model for the industry. Because it allows managers and owners to collect digital rent payments from their residents.
  • The ownership or management group does not incur a charge because those transaction fees are paid by the resident.


  • Management companies that use this type of pricing model typically have 20-30% digital rent payment adoption, which is considerably lower than the other models.
  • Residents who would prefer to pay online may drop off a check simply to avoid a convenience fee when paying rent.

The bottom line:

This remains a viable and effective strategy for property management and allows management to avoid direct costs while still offering digital payment options. Although it results in a lower adoption rate compared to fee-absorbing models, it maintains a balanced approach by shifting financial responsibility to residents.

For properties prioritizing cost management over maximal adoption rates, this model presents a practical solution. It allows property managers to offer digital conveniences without financial strain on their operations, making it an attractive option for properties weighing cost against digital adoption benefits.

#2: Standard Incurred

The property management company pays the digital rent payment processing fees for one or more payment types (i.e. ACH) on behalf of their residents. Renters overwhelmingly said that the ability to pay rent without a convenience fee would be the most useful tech feature in their community according to SatisFact’s Biennial Online Renter Study.


  • You’re providing your residents with a free and convenient digital rent payment option. Not surprisingly, with this model, usage typically doubles, enhancing the convenience of rent payment without fees.
  • Also, if you incur not only the ACH, but the credit card transaction fees as well, you can position this as a major resident perk. Because you’re basically giving them free points, airline miles, etc. every time they pay their rent with their rewards card. Not many management companies go this route, so it would provide a competitive advantage for your property.


  • The cost to incur one or more of the transaction expenses for the electronic rent payment method options.

The bottom line:

The cost for a property management company to incur ACH processing fees is approximately $1/transaction. Compare that to the cost to process a paper payment, which based on your labor costs can range anywhere from $3.00-$10.00 per transaction.

Some companies perceive absorbing transaction costs as an unnecessary expense. But when you see how it impacts digital payment adoption and the efficiency that accompanies it, there’s a strong case for incurring ACH fees on behalf of your residents.

Companies who pass transaction fees on to residents have a lower percentage of online payments than ones who absorb the fees. We compared two groups of similarly-sized multifamily companies to tease out the effect of incurring fees. We found that the group that incurs fees sees an average of 37% higher digital payment utilization rate than those who pass the fees to residents.

This chart show a comparison of two groups of similarly-sized multifamily companies regarding the effect of incurring fees. We found that the group that incurs fees sees an average of 37% higher digital payment utilization rate than those who pass the fees to residents.

#3: 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 digitally. It’s a subscription model that works best for management companies with over 50% adoption.


  • Because ACH transaction fees are included in this model, you’re giving residents a free digital rent payment option.
  • This allows you to charge your own fee to process paper checks, cash, and money orders.
  • Management companies that go this route have substantially higher digital rent payment adoption rates in the 70-90% range.
  • They also dramatically reduce the time and operating expense of paper payments which frees up their staff to work more important initiatives.


  • A monthly per-unit subscription cost.

The bottom line:

At the time of writing this article, the industry average pricing for a management company to incur ACH transaction fees is $1 per transaction. The monthly cost for subscription ACH is typically around 50 cents per unit. So once over 50% of your resident payments are digital, it makes more sense to switch to the subscription model.

Here’s why: The table below assumes a 1,000-unit building and illustrates the cost to incur per pricing model based on the percentage of digital rent payments they collect.

Here’s why: This table assumes a 1,000-unit building and illustrates the cost to incur per pricing model based on the percentage of digital rent payments they collect. Once over 50% of resident payments are digital, it makes more sense for property managers to switch to the subscription model; one of the electronic rent payment pricing models.

Take a look at the graph below that shows the percentage of digital rent payments depending on the pricing model. The Subscription ACH plan is the best option for property management companies that are serious about increasing digital payment adoption.

This graphs shows the percentage of digital rent payments depending on the electronic rent payment pricing models. The Subscription ACH plan is the best option for property management companies that are serious about increasing digital payment adoption.

Step 2. Charge residents for paying with a paper check

In most areas, when you offer a free electronic rent payment option to your residents, it allows you to charge a fee to those who still insist on paying via check. As long as your residents have one free payment option, the ball is in your court. You can choose what payment methods to allow or deny.

In a New York Post article, a local real estate broker commented that most landlords have been offering digital rent payment methods for the past few years. However, there was a major uptick in landlords either requiring rent to be paid online, or at least heavily discouraging other forms of payment.

Step 3. Provide an incentive for residents who sign-up for AutoPay

AutoPays are a win-win. Your residents can “set it and forget it” and enjoy the convenience of having their rent paid for them automatically. And you can count on digital, on-time payments each month.

But oftentimes residents don’t know where to go or how to get started. Since it’s mutually beneficial, why not offer a little incentive? Run an AutoPay contest, offer a small local gift card to residents who pay via AutoPay for three consecutive months, or do what Planned Property Management did and incur the first fee on the resident’s behalf.

Offer AutoPay incentive strategies

With goals of achieving high digital rent payment adoption at their properties, Planned Property Management decided to incur the processing fee on their residents’ behalf for their first digital payment. After that, the resident would incur a modest convenience fee if they chose to continue to pay digitally.

“I would estimate at least 80% of our tenants have used Zego at least once. It is so much easier than writing a check and adoption has grown considerably within our tenant base.” – Mary Francis, Collections Manager, Planned Property Management

Offer electronic rent payment rewards program

The NAA interviewed Stephanie Puryear Helling of Greystar about their resident incentive program, “If a resident completes certain activities, such as renewing their lease or paying rent online, they can obtain point values toward various incentives. The program engages our residents and incentivizes them to participate in online, paperless activities.”

Offer flexible rent payments

Typically, rent is your residents’ largest monthly expense. With flexible rent payments, residents can pay rent on a schedule that works for their own budget and cash flow, while your properties get paid in-full and on-time at no cost to you. Now, renters can sign-up for flexible rent payments within the Zego app. Our partner, Best Egg, completes on-time payments on their behalf, while allowing them to split their rent into smaller, stress-free installments.

Step 4. Close off your on-site drop boxes

According to the NAA, property management companies that eliminate paper checks average a 50% decrease in delinquencies, along with many other benefits. And the easiest way to eliminate paper checks altogether is to close off your on-site drop boxes and offer a free digital rent payment option as an alternative.

Transitioning to paperless payments

The Franklin Johnston Group, a developer and manager of multifamily residences in the conventional, senior, luxury, and affordable housing sectors, implemented Zego portfolio-wide. After months of smooth rent cycles, they decided to implement a paperless rent rule. “We felt confident in the Zego system. So we gave residents notice five months in advance that we were only going to accept digital rent payments,” said Melissa Pullin, Operations Manager.

Franklin Johnston’s rent collection process is now dramatically improved and they saw increased staff productivity and resident satisfaction as a result. “Before Zego, our community managers were manually entering resident payments into our system.” But now, “without the manual processes and the potential for human error, our on-site teams focus on important things like resident satisfaction.”

“I’d estimate every community has a week’s worth of work saved by going paperless. The majority of our residents supported the change because, in the end, it’s easier for them. Those who were hesitant came around after we showed them how to use the system and made them comfortable with the process.” said Stephanie Bertucci, Portfolio Manager.

Step 5. Educate residents on the benefits of electronic rent payment reporting

Best-in-class payment providers will offer rental payment credit reporting, which will help set your community apart from your competitors.

  • Less than 1% of Americans see their positive rental payment history in their credit files
  • 17% of multifamily rental property executives said they report digital rent payments to credit bureaus

Allowing your residents to build their credit with their digital rent payments will not only reduce the amount of paper checks you receive but also decrease late payments. It also attracts reliable renters, filling vacancies with quality tenants.

Offering this service can significantly diminish the volume of paper checks, reducing late payments and attracting more reliable tenants who are invested in their financial health. 73% of renters also said they would be more likely to make on-time rent payments if property managers report rent payments to a credit bureau.

This proactive approach in reporting can transform how payments are perceived, turning a routine transaction into an opportunity for residents to invest in their financial future.

The future of rent payments is digital

Adopting a strategic electronic rent payment pricing model is essential for property management companies aiming to increase online payment adoption among their residents. By implementing models that either absorb or lower transaction fees, property managers can significantly enhance the resident payment experience, leading to higher satisfaction and increased digital payment adoption. This move not only streamlines operations but also positions your property as a modern, resident-centric community. With the right approach, the transition to digital payments can lead to more efficient operations, improved cash flow, and a stronger bottom line.

Go 100% digital with resident payments

With Zego Pay, reduce the time and costs associated with manual payment processing while providing your residents with convenience and choice of multiple payment options.

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