10 Things Rental Agents Should Ask Their Current or Prospective Rental Payment Provider
There are many payment applications and software providers claiming to do all it takes to manage rental payments, but rental payment processing is not for the unprepared.
Payment service providers are governed by strict legislative rules and regulatory frameworks, covering issues such as corporate governance, the management of trust accounts and the protection of personal information.
And while there are various providers that might comply with the applicable laws and regulations, there are further questions that you as a rental agent should ask your payment provider or prospective provider:
1. Does their payment platform make your annual audit easier? Audits can be stressful and time-consuming for rental agents – and a lengthy audit process can get in the way of their regular tasks. A payment processing system that provides complete and well-organized data makes audits quicker and easier, but not all platforms do so. Ask your provider how, specifically, their system helps during audit season.
2. In the normal run of business, professional money handling is just as important. Can your provider’s system pay all landlords, all suppliers and the agency from fully reconciled client accounts within minutes?
Or will your clients be kept waiting for their money while you struggle to reconcile large numbers of transactions spread out throughout the month?
3. Who owns their payment processing system While some popular platforms are independently owned, others are operated by property managers and estate agents, or by people with close ties to specific agencies. Ask yourself if you could trust a rival agent to manage your rental payment processing.
4. Can their system tell you where your clients’ money is now, or where it has been at all times since coming into the system? The system should offer an automated audit log that informs you of every transaction on the platform and lets you see who made it – and that record should be saved permanently and automatically in such a way that it cannot be changed or deleted
5. What measures do they take to keep customer data safe? A provider should offer bank-level security, including state-of-the-art encryption, and keep backups in multiple secure locations. Data loss – or worse, data theft – can result in huge losses to clients and destroy an agency’s reputation.
6. Is training and technical support readily available, for free, for the lifetime of the contract? How does the onboarding process work? Will a real person be available to help you while you migrate to the new system? With a service as vital as payment processing, you should always be able to get timely help from a dedicated expert via telephone or e-mail.
7. How clearly are the payment platform’s trust accounts separate from one another? Some payment services providers cut corners by pushing incoming payments to a single settlement account, but this creates a risk of paying one landlord with another landlord’s money – or even of using tenants’ security deposits to pay for repairs during the lease. Payment providers can prevent this by keeping trust funds separate at all times – ask your provider if they do.
8. Are your trust accounts reconciled to the cent, daily? Does your service provider have a dedicated team of professionals who handle this? Regular reconciliation of payments ensures that accounts are more accurate and that landlords and contractors receive their payments more quickly.
9. Does your provider charge extra for functionality that should come as standard? Some payment services platforms restrict vital platform features to premium users. You should also check that there is no limit to the number of landlords or properties that you can manage on the system – or risk an expensive surprise down the road.
10. What is your provider’s track record in the residential rental payments space? Ask your provider for their credentials – and ask yourself if you can afford to gamble on an untested system.
Don’t settle for less
Asking the right questions will ensure that agents find the best possible payment processing partner to work with. As with any financial partner, it’s vital to understand all the possible pressure points before signing on the dotted line.
While aggressively-priced payment processing systems may look tempting, particularly in uncertain economic times, they may only be able to reduce their prices by cutting corners – and with so many legal requirements to meet when it comes to payment processing, there are some corners that shouldn’t be cut.