Credit Cards...

Do you accept credit cards as a form of payment for rent? Open discussion for feedback, usage rates, comments, etc

This can be a good thing for your delinquency if you were to do so. I would not limit this to just credit cards; I would accept debit cards as well. As a resident; I would object to being charged a 'convenience fee' to use a credit card. If the resident chose to use a credit card for more than a one time thing (meaning that they did this every month), I would find a way to absorb that 'convenience fee' if there is one. Why would I use a credit card (or debit card) to pay my rent when I can simply go to my bank's website (in my case, BofA); enter my property as an online billpay recipient, it probably will not be listed; so I spend 10 minutes entering the property address, name of the property, any other information I want to appear on the check, my monthly rent amount, and the date I want the check to arrive in the office by. The bank will automatically cut a check and drop it in the mail so it arrives on time; AND send me a reminder that the process for that month's payment has started. I have never paid a late fee, an NSF fee, or a convenience fee to pay my rent. I don't even pay my bank for my account; because it is free with direct deposit.

Accepting credit and debit cards in the office can also be used for application fees and reservations deposits as a convenience.

We have used and investigated many services for accepting credit and debit cards. At this point, only PropertyBridge (a MoneyGram company) seems to be able to do PIN-less debiting, which is much less expensive than a typical credit card processing fee would be, by 50% or more in most cases. Yardi Cash Management is supposed to be able to offer PIN-less debiting sometime this summer, so that may be worth investigating as well. We used to charge a convenience fee for the service, but when we saw the improved productivity that came from no longer having to manually post each payment that came in, we eliminated the fees to increase participation. Whatever you decide to do, I suggest making sure that your system integrates with your property management software. Your site managers will love you for it!

For those using credit cards to process app fees are you doing them online and if so what vendor are you using?

Both Yardi's product and PropertyBridge are web-based products.

I'm sorry I didn't make myself clear enough. I wasn't sure if anyone had any experience setting up online apps WITHOUT using a service. We like to do things in house here. We've created the services but we're running into brick walls with the credit cards. All of our properties have separate bank accounts so we'd have to setup 30+ merchant accounts. Anyone have any experience doing this WITHOUT help from the big boys?

How does anyone get around the Reg E requirement that a card holder can dispute the charge, thus erasing any rents payments made via either debit or credit? As we understand it, if a person buys or pays for anything using their credit/debit card and are unhappy, they can file a Reg E Inquiry with their bank. The bank then investigates the charge and can remove the funds from your bank account.

We are investigating how to get merchant account either online or in office for accepting of application fees only. We are reluctant to allow rents or security deposits to be paid by credit / debit cards.

Would like to hear how you are dealing with this.

Jackie wrote:

We are investigating how to get merchant account either online or in office for accepting of application fees only. We are reluctant to allow rents or security deposits to be paid by credit / debit cards.

Would like to hear how you are dealing with this.

This is precisely why we don't allow credit card/debit payments for rent as well. We are ALSO in the process of trying to setup a merchant account for ONLINE app fees (we currently have one in the offices using terminals for app fees, pro-rate, and security deposits).

Jackie wrote:

How does anyone get around the Reg E requirement that a card holder can dispute the charge, thus erasing any rents payments made via either debit or credit? As we understand it, if a person buys or pays for anything using their credit/debit card and are unhappy, they can file a Reg E Inquiry with their bank. The bank then investigates the charge and can remove the funds from your bank account.

We are investigating how to get merchant account either online or in office for accepting of application fees only. We are reluctant to allow rents or security deposits to be paid by credit / debit cards.

Would like to hear how you are dealing with this.

This is exactly why when you set up a RECURRING debit/credit card payment; you need the resident to sign a form that states they are authorizing the payments. In the event you have a chargeback; you can contest this by sending this form with their signature. Your vendor that does this for you should have this document available for you to use. Make sure you get 3 copies: 1 goes to the resident, 1 goes in your resident file, and the third goes to the vendor.

You should also have a credit card reader that prints out a receipt and proves that the card was actually SWIPED at least for the first transaction to attach to the form. With this you can also process application fees as well. Just print more than one transaction receipt to attach to the application AND give to the applicant.

That is for recurring but I assume you do not allow ONE TIME payments? The other rationale for not accepting credit card payments is the 2-3% you have to pay for their ability to do so. They are resistant to that type of "write-off".

Bill Szczytko wrote:

That is for recurring but I assume you do not allow ONE TIME payments? The other rationale for not accepting credit card payments is the 2-3% you have to pay for their ability to do so. They are resistant to that type of "write-off".

The truth is that if you offer the residents to make this a recurring payment that they authorize, they will more than likely do just that (I know I would if it didn't cost me any extra). But a one time payment is another reason to have a card reader onsite so you can prove the card was SWIPED and initiate a policy of verifying the ID of the cardholder to prevent fraud. Have you ever been successful in contesting a charge where your card was swiped and you provided a signature?