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Rent due? Fire up the computer

Online payment is slowly gaining ground, as major rental operators are feeling the demand.


Each month, many a Philadelphian digs through a loose assortment of stubby pencils and uncapped pens, crinkled take-out menus, orange-handled scissors, old batteries, and half-used rolls of tape hunting for a checkbook - untouched since its last use 30 days ago - to pay the rent.

But to stay competitive in the digital era, industry observers say, landlords ought to offer an amenity that changes the monthly ritual from searching the junk drawer to surfing the Net:

Online bill-paying.

"There will be a lot of pressure from residents to move to online payments," said Rick Haughey, vice president of industry technology initiatives for the National Multi Housing Council (NMHC) in Washington. "This next generation is just getting everything online."

In the last three years, the number of rent bills paid online has jumped 66.1 percent, while settling up in-person fell 13.9 percent and mailing rent checks dropped 24.9 percent, according to a report from Boston-based Aite Group L.L.C., an independent research firm that specializes in issues affecting the financial-services industry.

Among multifamily-housing operators in the Philadelphia region already offering a paperless payment method are University City Housing and Pennrose.

But several major owner-operators in Philadelphia are feeling the pressure. Both PMC Property Group, which has more than 40 rental communities in the city plus additional properties in Pittsburgh and six other states, and Dranoff Properties are researching the payment option.

Scully Co., which has about 6,000 apartments locally and about 1,000 other units outside the Philadelphia market, implemented an online portal for payments in 2007, said Christy Metz, director of marketing.

Today, Jenkintown-based Scully receives about 60 percent of rent payments online, said Metz, who added that the company continues to accept checks and money orders.

Besides saving stamps or avoiding visits to the management office, tenants can set up automatic payment, which means no more late fees.

For property owners, it means less time chasing tardy tenants and fewer visits to the bank, Metz said.

"It is an all-around win-win," she noted.

According to the 2013 NMHC/Kingsley Apartment Resident Preferences Survey, 78 percent of the 14,690 residents polled nationally indicated that they preferred to pay rent electronically or online rather than at management offices.

Those surveyed within the Philadelphia market were even more interested in online payments, with 83 percent saying they would rather log on to pay rent.

"It has become now an expectation with renters, rather than being a differentiated amenity," said Matt Golis, chief executive of Walnut Creek, Calif.-based YapStone Inc., which provides an online-payment platform to property owners.

The level of adoption in this region is similar to that of other parts of the country, with student housing more likely to offer online-payment systems than traditional multifamily buildings, Golis said.

"You have a combination of parents paying on behalf of the students and the millennials . . . some of them have never written a check before," he added.

Scully's online portal is most successful in urban areas and among students, but tenants across all demographics use the system, Metz said.

"This is what people want," she said.

Refining the ability to pay with a credit card is the next phase, Haughey said.

The transaction-processing fee incurred with the swipe of plastic can add a substantial dollar amount to a tenant's monthly housing bill.

"There has been an ongoing discussion surrounding that with the industry and the credit-card companies," he said, "and they are still trying to work out a solution."

A long-term goal is syncing software across platforms so that an online portal works as an app on mobile devices as well as a website, Haughey said.

But, Metz cautioned, "the industry tends to be about a year or two behind what every other company has embraced."

Regardless, demand for the ability to pay rent online is rising.

"The late adopters [of online payment systems] are going to feel the marketing pressure to do this soon," Golis said. "It has become a necessity."