Rental Owners rent out properties in order to collect revenue in the form of rental income. It sounds like an easy concept, all though collecting is not always that easy. From time to time Tenants will come across unexpected events, whether it is a car accident, medical issues or loss of job. These types of events can have a strain on the tenants financial situation making it more difficult to collect rent. Some property management companies opt to take additional forms of payment such as credit card. Collecting by credit card helps with rent collection but it also increases your expenses. Credit card payments can cost rental owners between 1.75% and 3.5% of the total amount. In the past property management companies could not avoid these fees because it is not legal for them to add a fee for credit card. Recently the rules have changed and a legally compliant surcharging solution has been developed.
If property management companies accept credit card they will see a huge increase in tenants paying with credit card. The reason for this is most cardholders will opt to use a credit card to collect points and rewards. Going back to our previous point, accepting a credit card can bring value when tenants cannot afford the rent but how do we incentivize them to pay with something besides credit cards. If every tenant paid with credit card the property management company or landlord would see an immediate reduction of 1.75 to 3.5% to their bottom line.
Most consumers are not even aware that it costs the business who takes the card the fees. Most Consumers assume that the credit card company pays for this.
Next time you see that commercial that says "Apply for our new credit card and receive 1.5% cash back" remember its not the credit card company paying for this, its the business accepting the credit card.
Until recently there has been no way for businesses to accept credit card while incentivizing customers to pay with an alternate source. Some businesses will just flat out add a fee for credit card, not realizing that this isn't legally compliant and they could be fined a significant amount. In order for a business to legally surcharge they must never profit off a transaction and it is virtually impossible for the business to know how much a card costs at the point of sale.
Their is a solution that is a legally compliant surcharging solution allowing property management companies to pass on the fee for credit card to the tenant. The program gives the customer the ability to take credit card while incentivizing them to pay with alternate form of payments. The solution is perfect for property managers because it allows them to collect on more bad debts. If a tenant does not have the money to pay rent, they can now put it on a credit card. The program allows property managers to accept virtually any amount of volume for a low fixed monthly payment.
Under the program you can not legally surcharge for debit card. The merchant has the ability to accept debit card but they pay 1% plus .25 cents per transaction on personal debit. They can also opt out of accepting debit, if a customer is able to pay with debit they have the funds to pay via ACH or Check which is a cheaper option for the business.