Cheques vs. Electronic Payment Processing (EPP) ?

York National Realty Inc. |

Real Estate Services Aurora Ontario

Advice & Columnists 2014

By Chris Seepe

Cheques, also called “bills of exchange” go back to the First Persian Empire in 6th century BCE. The modern printed namesake came into service with the Bank of England in 1717. Today they are used in every economy around the globe but their days might be numbered. The availability of the Internet has caused a shift by consumers and businesses to online payments, generally called electronic payment processing (EPP) . The 2014 Canadian Internet Registration Authority reported that nearly 80 percent of Canadians are online and they spend more time online than any other country.
EPP is time-efficient and eliminates material costs. It also offers higher security and privacy than cheques. So, why would so many landlords still choose cheques instead of embracing Electronic Payment Processing?
Technology should consider the needs of the lowest common denominator if it is to be adopted. The solution must be simple, easy to use and convenient.
Getting Landlords and Tenants to use this new method has been a challenge. Landlords are required by law to protect personal information, this concern about the security of such information along with doubts about reporting, accounting, and accountability has kept them from switching to EPP. Addressing this concern for security by providing additional information could help pave the way fro greater participation. The 2014 survey by the Association for Financial Professionals Payments Fraud and Control reported that 60 per cent of North American corporations experienced payment fraud, of which 80 per cent were attributed to paper cheques. As a result some 28 per cent of companies suffered a financial loss.

EPP solutions are not all the same.

Eliminate credit card and e-commerce offerings, they charge a percentage of each transaction. Even one per cent adds up to be a notable annual expense. Credit Card are private financial instruments of the banks. Not every financial institution will accept every credit card. Some institutions require three to five business days to process a transaction, and most require tenants to reveal personal and credit information.
Credit card services can claw back rent money if the tenant submits a case to have the money refunded. A benefit of the debit card is that the tenant can only pay with funds that are actually in their account. This eliminates NSF charges and the holding of funds. EPP also provides instant notification of payments.
Features and benefits of EPP could gradually win landlords over. They have low per-transaction fees, require no training costs and have no setup or monthly fees.
TenantPay is a payment portal that collects rent from various sources, aggregates and delivers the funds to the landlord’s bank account within 30 hours. This process saves time and money by eliminating individual deposit fees. It is a true banking instrument, accepted by every financial institution across Canada.
Some landlord’s are absorbing the cost of TenantPay to encourage tenants to use it, because of the relatively low cost and the hassle-free experience. Tenants could pay their rent exactly as they would their utility bill. Best of all, TenantPay doesn’t require any personal information. I gave each tenant a single, non-descriptive number – nothing else.
Multiple tenants residing in the same suite can use the same number to remit payment. Parents can make payments from any province and setup recurring monthly payments for their children attending school. It takes only seconds for a tenant to add it to their bill-paying list. A tenant can’t transfer funds they don’t have so you’ll never get another NSF notice or the associated costs. It’s super-convenient for a tenant to pay in parts too if he doesn’t have all the money at once.
There are many reasons for replacing cheques with EPP. You’ll eliminate the cost of materials and postage, reduce the risk of privacy exposure, boost your organization’s productivity and provide the simplest, most private, convenient, flexible and secure payment solution available for your tenants.

Chris Seepe is a commercial real estate broker and broker of record at Aztech Realty in Toronto.