Many renters and property owners still send in their monthly payments via check. It's a tried-and-true method that works.
However, this approach has several drawbacks — both for the payee and the recipient.
When sending in rent or mortgage payments via check, payees must:
- Find stamps and envelopes.
- Make trips to the post office.
- Spending time writing checks.
Worst of all, they must have the presence of mind to follow the above steps every month like clockwork. As you can imagine, delinquencies are fairly common in the world of commercial and residential real estate.
In many ways, the recipient is even worse off.
Each incoming check needs to be processed, deposited and recorded — often by hand. According to some estimates, paper-based checks cost recipients anywhere from $4 to $20 per payment — once you factor in hidden expenses like:
- Materials (e.g., ink, paper, equipment).
- Employee hours spent handling each check.
- Daily, weekly or monthly trips to the bank.
Those costs really start to add up as your portfolio of managed properties continues to grow.
Yet using an online payment portal can eliminate these expenses and deliver a host of important advantages.
How an Online Payment Portal Helps Your Real Estate Management Company
An online payment portal works very similar to a traditional e-commerce checkout cart — users complete their transactions from the comfort of a PC browser or smart device via the customer payment portal.
The primary advantage behind this approach is cost.
Because payments happen electronically without requiring human intervention, your team doesn’t have to invest as much time handling and processing each incoming check. This frees valuable resources for more important activities — like marketing your services and adding more properties to your portfolio.
The benefits don’t stop there, though. Additional advantages of online payment portals include:
- The ability to collect payments 24/7. This can dramatically reduce the frequency of delinquent payments.
- Faster account settlements. All payments happen instantaneously, eliminating processing delays and unpredictable cash flow.
- Enhanced payment security. You don’t have to worry about checks getting lost in the mail.
- Customizable recurring billing. Set it and forget it billing schedules let you select the frequency, payment date, and amount to be debited from your account
- Greater convenience. Your users can handle their accounts while on the go — no matter where they are.
- Smaller carbon footprints. Your business can reduce its environmental impact by removing the need to use stamps, envelopes, invoices or deposit slips. Users also enjoy these benefits on their end as well.
- Superior tracking and analytics. There’s no need to manage stubs and slips since online payments create a digital paper trail.
Those are the main benefits, but are there any downsides associated with collecting payments online?
The Disadvantages of Online Payment Portals
The above benefits don't happen automatically. For starters, you have to get your system set up — a process that requires migrating some of your current paper-based infrastructure online. This step might also involve shopping for a new vendor, installing software and training employees.
You may also have to train your clients how to use the new system as well. Though this probably won't be a major hurdle since more than 66 percent of U.S. consumers are already accustomed to paying bills online or through their mobile devices. As long as your portal follows basic web standards, the transition should be relatively harmless.
Another hurdle is cost. Payment portal fees vary depending on how the system is set up, with most vendors offering flat fees, percentage fees or a mix of both. Yet even with the more expensive vendors out there, accepting online payments is still less expensive than handling paper checks. Plus, given the other associated benefits of having a payment portal, it’s an investment that pays for itself.
Furthermore, it truly is a buyer's market, making it easy to shop around for attractive rates. In fact, you may feel overwhelmed by the sheer volume of options, so how do you choose the right online payment portal for your business?
Which Online Payment Portal Should You Use?
Arguably the most important element is fraud protection. You want a payment provider that follows the latest data security standards. Otherwise, your clients' financial information could become compromised.
But a secure payment portal is only the primary concern, you also need to focus on setup ease.
While it's possible to custom build an online payment portal from scratch, we already support many third-party shopping carts to help you get started. We also offer hosted payment pages that can transform your existing site into a hassle-free payment collector. Simply insert a few snippets of code, and you’re good to go.
Lastly, you want a payment portal that is easy to use. By this, we mean choosing a solution that minimizes the amount of time and effort required to manage incoming payments.
At BluePay, we offer a number of powerful tools to make payment collection as easy as possible, including:
- Scheduled reminders that instantly alert clients to upcoming payments.
- Recurring billing that automatically deducts funds every month.
- Payment modules that seamlessly integrate all transactions with the accounting, bookkeeping, tax prep and CRM platforms your team already uses.
Most important, our online solutions allow you to accept a diverse range of payment options from debit and credit cards to ACH and e-checks.
To learn more about BluePay’s PCI-compliant solutions, contact our merchant services team today.