The use of cheques is declining worldwide and may soon become a thing of the past.
In the UK, plans were unveiled in 2009 for cheques to be abolished by 2018, while usage has already dropped 70% from its peak. The story of declining cheque usage is the much same throughout the rest of Europe and to a much lesser degree in the US.
It is not just the banks who want to do away with cheques either. Globally, electronic payments (or e-payments) account for 85% of all non-cash payments (Canadian Payments Association, 2010). People prefer swiping cards, paying bills online, and paying with their mobile phones. Future generations probably won’t even know how to fill out a cheque. For property managers, this means that providing electronic rent payment options is not only more profitable and convenient, but will be absolutely necessary in the very near future.
If you have been a landlord or professional property manager for more than a few months, you already know that accepting cheques can be a time consuming waiting game. Besides having to physically collect and deposit them, fielding tenant calls about them being “lost in the mail” and worse having to deal with fraudulent and bounced cheques, they are an incredibly expensive way to accept payments. In fact, you really need to factor in a good amount of extra time and labour if you are going to accept cheques from tenants.
Given the demands in extra manpower, delays in payment settlement, fees for not sufficient funds (NSF) and bounced cheques – the losses can be significant, even on a small number of units. This unfortunately means taking in less investment income as an owner, charging more for your services as a property manager and asking for higher rents as a landlord. Collecting rent does not have to be this hard.
Electronic rent payments bring significant labour savings and can also act as a powerful marketing tool which can help keep your properties occupied and attracting the best possible tenants. People want easy ways to pay. Sometimes they are late paying their rent simply because it is inconvenient, not because they don’t have the money. E-payments allow tenants to set up automatic withdrawals or allow for online bank payments, which will result in a more consistent income stream and less administrative work overall.
Prospective tenants will simply enjoy the peace of mind that comes with the flexibility to make e-payments. Many property managers overlook the benefits of mentioning e-payment options in their marketing, so stay ahead of the curve and make sure you mention that you accept e-payments.
