The top 5 rent payment software features you need (but might not have)
Learn how rent payment software features eliminate your biggest rent collection hassles, protect your rent revenue, and improve the resident rent payment experience.
What is rent payment software?
Almost all property management companies have rent payment software so residents can pay rent digitally. And because digital payments are the preferred way to collect rent, there are many rent payment softwares on the market.
But, they are not all created equally.
The best rent payment softwares ensure that on-site teams spend little to no time managing rent payments. At the same time, they give residents a seamless and convenient payment experience.
To meet these expectations, rent payment software is continually evolving. And, some of the latest and greatest features remove the biggest pain points in collecting rent.
So what do you need from your rent payment software to reach these ideals? Here’s our list of must-haves:
FREE DOWNLOAD Download The Property Manager’s Guide to Common Rent Payment Mistakes to identify ways to improve your rent collection process & get paid faster.
Want a more efficient rent collection process?
Download The Property Manager’s Guide to Common Rent Payment Mistakes to identify ways to improve your rent collection process & get paid faster.
#1 Revenue protection services to combat theft and fraud
Reputable digital payments providers offer programs that help combat returns, transaction errors, and fraud.
There’s a reason why. Transaction errors and fraud are increasingly problematic in rent collection cycles. For one, they result in lost revenue. Then, there’s all the work spent sorting these issues out. Your on-site teams must spend hours managing collections, reconciling accounts, and balancing the books.
That’s why services to minimize these instances are so valuable.
Account Connect services through your rent payment software minimizes errors and returns
Sometimes renters enter incorrect bank account information when they are making a payment. Usually this is accidental. But it can also be attempted fraud. Either way, the transaction is returned. So ideally, your software for rent payments should have a check in place to verify if the bank account is legit.
Zego partners with Plaid to verify resident bank account information before a transaction runs. This allows residents to securely link their bank account from their financial institution. That means they don’t manually enter the routing and account numbers. That way, there are no errors from keying in the wrong information. It ensures that any bank account is valid and active for transacting.
Reduce insufficient fund returns with Balance Verification
Insufficient fund returns happen when residents don’t have enough money in their bank accounts to cover their rent payments. Because it takes a few days for the transaction to be returned, they create a real bottleneck for revenue. Plus, they are a hassle for on-site associates, who have to reconcile returns and chase down the delinquent payment.
That’s why you need a real-time verification to confirm there are sufficient funds for transactions to clear. This ensures on-time revenue and reduces manual reconciliation work. Plus, residents are saved from unwanted charges for insufficient funds. Zego’s Balance Verification performs this audit for the benefit of both parties.
How Account Connect & Balance Verification works:
- Resident links new bank account with existing bank credentials
- Resident proceeds to make a payment with their account
- If a balance is sufficient, payment are approved. If a balance is insufficient, the resident is notified to use a different account.
Chargeback Defense services through your rent payment software minimizes loss
Chargebacks cost multifamily portfolios ten of thousands of dollars each year. A chargeback is a bank-initiated, forced reversal of funds back to a consumer when they claim a transaction is fraudulent. You probably see most of your chargebacks stem from application fees. However, rent payments are also a target.
Services like Zego Chargeback Defense helps minimize the hassle of chargebacks. We offer comprehensive defense including chargeback avoidance, protection, and recovery. From rent to application fees ACH to credit card transactions, our comprehensive solution gives our clients chargeback protection and peace of mind.
#2 Lockbox services help you achieve 100% digital payments
In an ideal world, 100% of your rent payments are digital. But we’re willing to bet that you still receive a stack of checks or money orders each month.
In fact, the Federal Reserve Bank of Boston’s Bill Payment Experiment and the Survey of Consumer Payment Choice found that 42% of rent payments are made with a check and 16% are made with money orders.
Just because your renters want to use a check or money order does not mean you are forced to use outdated processes to get paid. Modern rent payment software offers ways to convert checks and money orders into digital transactions.
Rent payment software converts paper payments into digital transactions
Take Zego Pay Lockbox for instance. It takes the task of handling paper-based payments completely off the table for your property staff. With a lockbox solution, residents mail checks to a secure P.O. box instead of bringing them to your management office. From there, the checks are imaged, processed, and integrated into your accounting software.
But be careful, not all Lockbox providers integrate payments with your accounting software. Recently Waterside Monclova transitioned from a Lockbox solution that was provided by their community’s bank to Zego Pay Lockbox. Because the bank offered no automation or integration with their systems, the community managers were still manually processing checks to ensure accuracy. By switching to a Lockbox solution that integrates with their accounting software, they no longer have to manually process checks saving them time and frustration.
Community Manager at Waterside, Sheila Bahnsen, explains the key difference: “With Zego I don’t have to do anything daily. I just glance at my reports to see where we are. It’s a big time saver in my day of not having to find quiet time to do manual data processing, make sure I don’t make an error and double check that my sheets are correct.” So, when selecting a Lockbox provider make sure they can integrate payments with your accounting software so you can benefit from the added automation.
And for money orders, there’s Zego Mobile CashPay. Renters go to a retail location (take Walmart for example) and make a cash payment at the CheckFreePay kiosk. Payments are electronically sent to you and integrated into your accounting software.
#3 Credit reporting for residents
The best rent payment softwares have credit reporting features that help renters build their credit scores. And, they are typically free for apartment operators.
Rental credit reporting is a win for renters and for property managers. It encourages on-time digital payments. And building credit for paying rent is a perk for your residents.
So how do these programs work? Let’s use Zego™ Pay LevelCredit as an example.
- Renters log into Zego to make their rent payment and opt in to LevelCredit at no additional cost
- All Zego Pay rent payments are automatically reported to 2 out of the 3 credit bureaus by LevelCredit
Rent payment software lets renters establish credit
The benefits of reporting rent payments to the credit bureaus are impressive according to a TransUnion study.
Consumers saw an average increase of 60 points to credit scores. And 60% of renters may experience this increase in the first month of reporting. Subprime consumers saw the most value. Nine percent of consumers went from unscorable to scorable with an average score of 631.
Credit reporting isn’t just a perk for renters. It can be a competitive differentiator for your community. TransUnion reports that 51% of renters are more likely to choose communities when rental payments are reported. Not only that, but it encourages on-time payments.
#4 100% Digital payment support programs
Reaching 100% digital payment adoption is a key focus for many apartment operators. That’s because a fully digitized rent cycle gives on-site associates more time in their day while improving cash flow.
But getting to 100% digital payment adoption shouldn’t fall squarely on your shoulders. Your payments partner should help you reach this goal. And top rent payment software partners do just that.
For example, we partnered with our customer, Kingsley Management Corporation, to help them reach their goal of 100% digital payments. We ran staff contests and resident contests to drive awareness and incentivize more digital payments. In a few short months, Kingsley was seeing over 80% digital payment adoption across their portfolio and the impact was substantial. Dakota Green, Technical Support at Kingsley told us, “We have way more time to work on important things within the community. Our team can actually help residents with their needs instead of spending their time processing 600 paper checks”
Digital payment adoption programs give you a roadmap for paperless rent cycles. These comprehensive programs provide instructions, checklists, sample assets, and additional tools to help you collect more digital payments. On top of that, you should have regular account reviews with your service provider about your digital payment usage. They provide you with metrics and KPIs to help you keep tabs on where you’re at with meeting these goals.
#5 Digital security deposit return through your rent payment software
Want to drive digital payments? Then you have to walk the walk. And when it comes time to return security deposits, you can’t cut a paper check. Your rent payment software should offer a solution for returning security deposits electronically.
It’s not just about driving more digital rent payments. Returning security deposits electronically is a win for all parties. Your staff won’t have to deal with mailing checks to the renter’s new address. And renters get their money back faster since they aren’t waiting on snail mail.
Need more rent payment software advice?
Rent payment software changes all the time. That means you might benefit by updating some of your rent collection services. If you aren’t sure, download our latest guide: The Property Manager’s Guide to Common Rent Payment Mistakes & How to Fix Them.