automated payments: progress and challenges

PROGRESS AND CHALLENGESResults from a National Survey – Automated Payments:

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Executive Summary ............................................................................3

Survey Results

Section I: Online Payments ................................................................ 4

Section II: Credit Card Payments ........................................................5

Section III: Check Payments and Processing Challenges ..................6

Conclusion ............................................................................................9

Appendix I:Survey Process, Respondent Profile and Methodology ....................10

Appendix II:Survey Questions and Responses ....................................................11

PROGRESSAND CHALLENGES

Results from a National Survey –

Automated Payments:

ABOUT THE AUTHORS

Art Dramby is the CTO of Drampac Consulting, a technology consulting firm specializing in the multifamily real estate industry. With expertise in enterprise systems and software applications, he provides strategic vision and evaluates anddesigns system strategies that reduce costs, streamline business processes and improve profits. Previously, Drambywas the Director of System Strategies at ConAm Management Corporation where he managed the development and implementation of innovative technology initiatives including software selections, business process reengineering, projectmanagement and change management.

Prior to joining ConAm, Dramby was with KPMG Consulting where he specialized in Business Process Improvement(BPI) and systems integration using a variety of methods including the intelligent application of new technologies forclients such as Visa International, Chevron, Petco, and FM Global. Dramby's other companies include 24 Hour Fitness,where he was the Project Leader for selecting and implementing Peoplesoft, and Epson America, where he was theManager of Cash Management and Investment Systems. Dramby holds an MBA in Banking and Finance from GoldenGate University’s Ageno School of Business and a Bachelor of Science in Business Administration from the University of Redlands in California.

David B. Cardwell is NMHC’s Vice President of Capital Markets and Technology, with principal responsibility for multifamily debt and equity finance and technology issues. Before joining NMHC, he was Senior Manager for Product Development at Freddie Mac, where he developed and implemented new multifamily mortgage products. Other positionsat Freddie Mac include Manager of Loan Production and Product Development and Manager of the Community Develop-ment Investment Group. Prior to joining Freddie Mac, Cardwell served in the Office of Affordable Housing Programs at the U.S. Department of Housing and Urban Development, as Director of Business and Redevelopment Activities forTrammell Crow Residential, and as Economic Development Director for the City of Falls Church, VA. He holds a Master’sdegree in City and Regional Planning from the University of Virginia and a Bachelor of Arts degree from the University of Maryland.

Acknowledgements

NMHC thanks the following individuals for their work in the development of the online survey instrument:

• Chris Berson, Home Properties

• Carl Bonner, Post Properties

• Jeff Callan, The Morgan Group

• Ken Hodges, Western National Group

• Scott Pechersky, Alliance Residential

• Lisa Williams, The Bozzuto Group

• Brian Zrimsek, The Irvine Company

Sponsors

This survey project would not have been possible without the support and participation of the following automated payment solution providers:

• NWP Services Corporation

• PropertyBridge, A MoneyGram Company

• RealPage, Inc.

• RentPayment, a Yapstone Company

• Yardi Systems, Inc.

Results of a National Survey – Automated Payments: PROGRESS AND CHALLENGES 3

EXECUTIVE SUMMARY

As technology becomes more integrated into people’s daily lives, apartment firms have found new opportunities to boost their operational efficiency and offer their busy residents additional convenience.

One of these technology-driven opportunities that is expanding at a rapid pace is payment automation, which allows residents to pay rent, utilities, security deposits or other leasing costs by credit card, online payment or similar method.The automation improves both the customer process and the back-end processing, reduces costs to the owner and improves cash flow.

Fortunately, many Americans have already embraced online bill paying; 63 million households pay at least one bill online, and more than 75 percent of these pay directly at a vendor’s web site.

This White Paper provides the results of a survey of 110 apartment firms about their experience in implementing automated payments.

Automating rent and associated payments (utilities and monthly services, application fees, security deposits and deposits to reserve apartment units) has expanded significantly in the apartment industry. There are many firms that offer automated payment solutions, and solutions are increasingly being integrated with property management software platforms.

These new systems allow residents and prospective residents to pay online, use credit cards, and pay from their bankaccounts using automated check handling (ACH) processing. However, firms are reporting that regardless of these options, most residents pay their rent by delivering a paper check to the office each month.

How do renters pay their rent? According to the survey results, 76 percent of rent payments are some form of check,while 22 percent are received via credit card (12 percent) or online ACH payments (10 percent).

Even though 81 percent of firms offer an online payment solution, only 18 percent of payments are now made by creditcard or online portal, and 70 percent of check payments received by apartment firms are still manually processed.

In stark contrast with a few years ago, the vast majority of responding firms (74 percent) accept credit cards to pay rent,and more than half of these transactions (55 percent) are done online.

For firms that accept credit cards for rent payment, 79 percent pass the convenience fee on to the resident. Most firmsthat accept credit cards (64 percent) have a flat fee pricing schedule, although 11 percent use a variable fee structure,and 4 percent use a tiered fee structure.

Integration issues persist between property management systems and payment solutions. Of the 81 percent of firms that offer online payment solutions, 21 percent have not integrated their payment solution with their property management software.

The main conclusion coming out of this research is that there is much room for improvement. To truly see the benefits of automated payments, more residents and property-level staff need to know how and when (and what type of) auto-mated payments make sense. And the industry's technology partners must work with owner/operators to address the integration issues.

SECTION 1: ONLINE PAYMENTS

Conducting business and making purchases online is both popular and convenient. A growing number of apartment residents should be looking at the online method as an alternative to the customary method of payment bypaper check. It also provides operating efficiencies for the leasing office by having the resident self-manage his or herpayment online.

Additionally, consumers between the ages of 18 and 42 (the peak apartment rental cohort) are driving the online tech-nology revolution. Although it’s outside of the scope of this document to fully address and analyze specific demographicdata as it relates to electronic payments, it will be important for the industry to adapt its payment practices to respond to these customers’ expectation of online payment options.

(Credit cards are certainly used to make online payments, but for the purposes of this survey, online payments here aredefined as residents using their bank accounts online to fund rent and other charges via an automated check handling(ACH) debit also known as EFT or electronic funds transfer.)

Online payment solutions offer owners and managers significant operating efficiencies over the traditional paper checksmailed or dropped off at the leasing office. These advantages include reduced data entry and errors, automatic postingof payments, improved turnaround on non-sufficient funds (NSF) processing, elimination of hand delivery of checks tothe bank and a quick crediting (usually less than 24 hours) of the funds to the owner’s account.

Such transactions are frequently used to pay security deposits or hold deposits, options offered by 55 percent and 48 percent of firms, respectively, as shown in Table 1.

However, while 52 percent of firms accept onlinepayments for rent, most residents do not establishrecurring payments for their rent, which would theoretically save them time and protect them frommaking a late payment. One-fourth (26 percent) ofrespondents said they don’t process any recurringonline rent payments.

There are a variety of reasons that may explain the relatively limited use of recurring payments byresidents. They might include residents’ preferenceto manage their cash flow and control the actualrent payment date as well as the challenge ofchanging or ending recurring payment arrange-ments when necessary. Other factors may includethe current economic uncertainty or indecisionabout how long they will stay in their apartment.

Given the wide range of possibilities that could be deterring residents from paying rent online, it is unclear when or if this method of payment – and specifically recurring payments – will grow in acceptance. However, given the operationalbenefits and continued effort to drive residents toportals and online initiatives, owners and propertymanagement firms are expected to continue to promote online payment functions.

4 Results of a National Survey – Automated Payments: PROGRESS AND CHALLENGES

TABLE 1Percent of Firms Accepting Online Payments by Type of Transaction

Percent Number Payment Type of Firms of Firms Security Deposits 55% 61 Rent 52% 57 Hold Deposits 48% 48 Utilities and Cable 35% 39 Application Fees 30% 33 Collections 0% 0

Total number of firms responding = 110

TABLE 2Firms Reporting Recurring Online Check Payments

Percent of Recurring Percent Number Monthly Payments of Firms of Firms 0 percent 26% 28 1 - 5% 14% 15 6 - 10% 6% 7 11- 15% 4% 5 16 - 20% 6% 7 21 - 25% 18% 20 26% and greater 0%


SECTION 2: CREDIT CARD PAYMENTS

The industry has struggled with implementation of a credit card payment option due to the fee structure of accepting such payments and subsequent cost to the apartment owners. There is also an added risk for apartment firms from credit card usage by residents; card holders may dispute transactions for up to six months. As a result, use of credit cards in the industry varies.

Still, most firms (70 percent) accept credit card payments for a variety of charges, and 74 percent will accept credit cardsfor rent payments (see Table 3). In terms of specific card usage, survey respondents reported that Visa (85 percent) andMasterCard (82 percent) are used most often, followed by Discover (49 percent) and American Express (25 percent).

Residents have not necessarily embraced the idea ofcharging their rent or other fees; according to this survey,only 12 percent of payments were paid by credit card, according to firms that accept credit cards.

However, while credit card use in the apartment industryhas traditionally been low, usage has been increasing inrecent years due to new leasing and property manage-ment technology. Residents and would-be residents cannow use credit cards to pay for application fees, depositsand other move-in related expenses when reserving orleasing an apartment online.

This trend is expected to continue to grow as propertymanagers aggressively promote leasing online and usingcredit cards to facilitate those initial transactions. Roughlytwo-thirds of apartment firms responding to the surveyaccept credit cards for move-in expenses, demonstratingthe industry’s willingness to absorb a credit card transac-tion’s convenience fee for new business such as a newlease. Additionally, more than half (55 percent) of the firmsthat accept credit cards for rent will accept them online,which is a greater percentage than in the rental office and over the telephone (see Table 4).

The convenience fee remains a difficult issue. Merchantbanks charge convenience fees to businesses such as apartment firms or retailers that accept credit cards for pay-ment. The majority of respondents (79 percent) pass this fee onto the resident, which can discourage credit card use.Others absorb the cost as a business expense, but the narrow margins in the property management industry makethis financially challenging for most companies.

Among firms that accept credit cards for rent, the most common way to cover this additional cost is to charge the resident a flat fee. Nearly two-thirds (64 percent) of the respondents prefer this model, which must adhere to the creditcard company’s convenience fee rules.

This simpler approach for the residents does not necessarily benefit apartment companies. Like other retailers, multi-family firms pay a variable rate fee (i.e., less than 1 percent to more than 3.5 percent of the transaction amount), whichmeans the flat fee they charge a resident may or may not cover their own credit card transaction cost, particularly if theyprocess a number of higher rent payments (e.g., in the $2,500 or higher range).


TABLE 3Credit Card Acceptance by Type of Transaction

Percent Number Transaction Type of Firms of Firms Rent 74% 81 Hold Deposits 63% 69 Application fees 55% 61 Security deposits 53% 58 Utilities/Amenities 52% 57 Collections 20% 22


TABLE 4Percent of Firms That Accept Rent Payment by Credit Cards by Type of Payment Channel

Percent Number Payment Channel of Firms of Firms Online 55% 61 Leasing office 35% 39 Phone 33% 36 Fax 8% 9


Other possible fee structures include a variable fee structure, but this is rarely used in the apartment industry due to the complexity of administering such a system—and in getting residents to accept a system that charges everyone a different amount.

The flat fee system is popular for several reasons. It offers marketing appeal among a broader base of residents, and it results in lower convenience fees, especially at the higher end of the rental price spectrum,for those who pay rent with credit cards. For example,the average flat fee for a $2,500 monthly rent would be$25, less than half of what a resident in that same apart-ment would pay under a variable rate of 2.3 percent,which would translate into a $57 fee.

One final note: Given the transaction fee issues, it should be noted that all online transactions must carry

the same convenience fee. This fee should also be based upon the payment channel (i.e., company web site) and notupon payment type (credit card versus electronic check payment.) This means that if an apartment firm charges a fee for a payment by credit card, then it must also charge the same fee for an online check payment.

SECTION 3: CHECK PAYMENTS AND PROCESSING CHALLENGES

Automation of payments for rents, utilities and other services at apart-ments has increased materially in theapartment industry over the past severalyears. Yet, only 18 percent of paymentsare now made by credit card or onlineportal, and 70 percent of check paymentsreceived by apartment firms are notscanned. As indicated by the figures to the left, the adoption of automated payment methods (online check pay-ments, credit card payment and scanningpersonal and business paper checks) lags behind industry efforts to offer andimplement these services.

That means that the majority of paymentsare still being processed manually, despiteapartment companies’ investment in vari-ous methods of automating the process(see Table 6). Regardless of the optionsavailable, the industry reports that the majority of residents continue to submitpayments at the property. The surveyfound that 105 of 110 respondents saidthey take payments at their properties.


TABLE 5Percent of Firms Implementing Credit Card Convenience Fees for Rent by Fee Type

Percent Number Fee Type of Firms of Firms Flat fee assessed 64% 52 No fee to resident 21% 17 Variable fee pricing model 11% 9 Tiered fee pricing model 4% 3


TABLE 6

Payment Method Average Penetration Rate

Manual Payments Cash 4% Personal checks 41% Cashier’s Checks/Money Orders 9% Commercial checks 2%

Automated Payment Solution Scan Checks 24% Electronic Funds Transfer (EFT) 10% Credit Cards 12%

Percentages in chart are the average of the penetration rates in various categories reported by all responding firms, so totals will not equal 100.

Payment Options & Check Scanning Use/Implementation

NOTE: Check acceptance data in this chart reflects a weighted average of all types of checks accepted (personal, commercial, cashier's, and money orders

0 20% 40% 60% 80%

Credit Cards

Online

Checks

Use %

Offered %

12%

70%

10%

71%

24%

62%

Approximately 11 percent of firms have transferred this activity to the corporate or regional office, but even some of those firms take the check at the property and send it to the corporate office for processing. The remaining firms (7 percent) rely on a third-party lockbox to process payment transactions.

A very small number of firms (4 percent) reported that they invoice residents or use a payment coupon. Also, the number of firms that charge residents a processing fee for online electronic check payment (automated check handling or ACH)is just over 15 percent, with two-thirds of those firms charging $2.50 or less per online electronic check transaction.

Surprisingly, usage of more streamlined, electronic payment methods by residents does not seem to correlate with firmsize. As Table 7 shows, the limited adoption is not a function of firm size, with online use among residents below 10 percent regardless of the size of the apartment firm or units managed.

A similar trend exists in credit card processing, but the implementation or use among smaller companies is actuallyhigher. This could be a result of larger firms implementing policies against credit card acceptance for rent payment.

Check scanning would seem to be a step toward automating the large volume of paper checks that apartment companies receive each month, and more than half of the firms responding (57 percent) do just that. However, not all checks are treated the same (See Table 8).

Actual usage of check scanning may be much lower than Table 8 might indicate. Table 9 illustrates that the percentage of checks receivedthat are scanned is well below 50 percent.

While widely used by banks, check scanning’sadoption in the multifamily industry has beenhamstrung by multiple problems (see Table 10 on the following page). Apartment firms saythey’ve had issues with both hardware and software components of this technology; one-third of firms say they’re worried about technology integration issues.

Making check scanning and payment automationwork at a particular multifamily firm depends onthe payment system, the level of customization,the connection with the property managementplatform and other related factors, including theinvolvement of third-party service providers in the payment process.

These third-party providers add a layer of complexity to the technology issues. Based on which providers the responding firms used(see Question 6 in Appendix II), the majority of apartment firms (70 percent) engage a third-party payment solution rather than application software offered through their property management software. Such


TABLE 7Use of Automated Payment Options by Firm Size

Size of Firm Based on Units Online Portal Credit Card (number of firms) Offered Use Offered Use

0 - 4,999 (41) 83% 6% 76% 16% 5,000 - 9,999 (23) 65% 4% 96% 13% 10,000 - 24,999 (23) 83% 9% 91% 5% 25,000 and over (23) 95% 6% 83% 12%

TABLE 9Check Scanning Usage by Firm Size

Size of Firm Based on Units Percent of Firms Percent of (actual number of firms) That Scan Checks Checks Scanned

0 - 4,999 (41) 54% 25% 5,000 - 9,999 (23) 57% 22% 10,000 - 24,999 (23) 65% 35% 25,000 and over (23) 57% 11%

TABLE 8Check Scanning by Check Type

Percent Transaction Type of Firms Personal checks 100% Cashier’s checks/money orders 70% Commercial checks (Check 21) 80%


decisions can result in technology integration challenges. This represents a critical issue to consider since nearly two-thirds (63 percent) of owners and managers have integrated their electronic payment systems with their propertymanagement software.

Payment Providers Identified by Survey Respondents

• CollectorSolutions

• EXS

• Infintech, LLC

• NorthStar

• NWP Services Corp./Resident ePay

• Ocius

• Payment Service Network

• PayPal/VeriSign

• ProfitStar

• PropertyBridge, Inc., a MoneyGram Company

• RentPayment, Inc., a Yapstone Company

• Resite (ACH Direct)

• Velocity/RealPage, Inc.*

• VIAKLIX

• Yardi Systems, Inc.*

• Internally developed

* NOTE: Velocity/RealPage and Yardi Systems operate payment solution applications that are integrated into their enterprise software property management solutions software.

Firms in bold are sponsors/supporters of the survey project.

TABLE 10Percent of Firms Reporting Check Scanning Issues

Scanning Issues Percent Reporting Issues

Integration issues with property management software 37% Hardware/scanner issues 33% Accounting/reconciliation 33% Money order, commercial and cashier’s check returns 33% Check amount verification by financial institution 29% Batch submission and/or internal submission errors 24% Processing time 24% Duplicates submitted for non-personal scanned items 10%

NOTE: Percentages are based on issues reported by 64 firms that reported check-scanning activities and issues; a significant portion of firms reported multiple scanning issues


CONCLUSIONS

This survey uncovered several key issues with automated payments in the apartment industry. First, most residentsare not taking advantage of the variety of channels for making automated rent payments and are still paying by papercheck. Second, apartment firms that have invested in a more streamlined or electronically based rent payment processare not getting the full benefit of these channels for two reasons: limited resident adoption and corporate problems related to technology usage and/or integration.

The industry as a whole and as individual owner/operators and vendors can overcome these obstacles in the following ways:

• Aggressively promote the use of automated payment systems by residents.

• Evaluate and/or fine-tune check scanning practices to reduce errors and gain promised efficiencies.

• Train property management staff about automated payment options (online, credit card, check scanning), including how, why and when to use the various methods.

• Cooperation among owner/operators, property management software vendors and payment service providers to address the integration and accounting issues that can arise when establishing or maintaining an automated payment system for a company or property. (Recent efforts to improve data transfer standards and ease integration should also improve automated payment systems.)

Many of these recommendations involve education, not large investments of money. To use these technologies effectively,more residents and property-level staff need to know how and when (and what type of) automated payments make sense.It is an effort worth making for apartment companies.

Given the negative impact of the economic downturn on many companies’ new technology initiatives, getting more value out of a firm’s existing technology investments is critical both for the apartment firm’s information technology and operations teams.

APPENDIX I: SURVEY PROCESS, RESPONDENT PROFILE AND METHODOLOGY

Survey Background and Process

Attendees of the 2008 NMHC Annual Apartment Technology Conference called on NMHC to conduct a survey of resident payment automation.

The survey was conducted from June 19, 2009 to August 7, 2009. The total universe of firms surveyed was 425 and included NMHC member firms as well as clients of the sponsoring firms (NWP Services Corporation; PropertyBridge, a MoneyGram Co.; RealPage, Inc.; RentPayment, Inc., a Yapstone Company; and Yardi Systems, Inc.).

The survey was conducted using an online form that required full completion for it to be accepted. Reminders were sentto non-responding firms every 14 to 21 days throughout the survey process. Responses were received from 110 firms,for a response rate of 26 percent.

Respondent Profile

The following is a breakdown of the profile of the companies that participated in the survey:

• 86% were owner/developer and management firms

• 12% were third-party fee management firms

• 59% of the firms oversee fewer than 10,000 units

The breakdown of the apartment firms by size of firm as measured by units owned/managed is as follows:

< 5,000..............................................................................................................38%

5,000 - 9,999 ....................................................................................................21%

10,000 - 24,999 ................................................................................................20%

25,000 - 39,999 ................................................................................................11%

40,000 - 59,999 ..................................................................................................4%

> 60,000..............................................................................................................6%

Survey Results Methodology

In most cases, the results contained in this report represent the percentage of responses to a question based on the total number of respondents (110). Some questions focused on use of a specific payment channel, such as credit cardsor online check processing through automated check handling (ACH). Response percentages in these cases represent only firms that implement these processes, which are less than the complete response universe. In some cases the percentages will not add up to 100 because owners and managers deploy multiple payment channel options and couldresult in multiple answers to a question.



APPENDIX II: SURVEY QUESTIONS AND RESPONSES

Unless otherwise indicated, the data provided below is the number of responses to each question, not the percent of respondents. The authors then calculated percentages used in the analysis based on the universe of 110 respondentfirms. However, in select cases when respondents indicated they did not participate in the activity in question, their response was not used to calculate percentages. In some cases the percentages will not add up to 100 because ownersand managers deploy multiple payment channel options and could select multiple answers to a question.

Question 1: Firm Type (Please select one)

Owner/developer and manager............................................................................93

Owner that relies exclusively on third-party property management ......................3

Third-party management company......................................................................13

Fee developer with limited or no property management activities ......................1

Question 2: Total number of units owned and managed as of the last day of your most recently completed fiscal year (Total units include leased, vacant, down and/or out-of-service.)

< 5,000 ................................................................................................................41

5,000 - 9,999 ........................................................................................................23

10,000 - 24,000 ....................................................................................................23

25,000 - 39,999 ....................................................................................................12

40,000 - 59,999 ......................................................................................................4

> 60,000 ................................................................................................................7

Question 3: Do you offer an online payment solution where residents can make and self-manage payments?

Yes ........................................................................................................................89

No ........................................................................................................................21

Question 4: Is your payment solution integrated with your property management software?

Yes ........................................................................................................................69

No ........................................................................................................................23

Do not have an online payment solution ..............................................................18

Question 5: Which property management software provider are you using? (Check all that apply.)

We do not integrate payments with our property management software..............9

Yardi Voyager Version 05.0+ ..................................................................................8

Yardi Voyager Version 06.0+ ................................................................................45

Intuit MRI ..............................................................................................................20

RealPage OneSite 3.0+ ........................................................................................16

AMSI eSite..............................................................................................................7

Other ....................................................................................................................13


Question 6: Who is your online payment solution vendor? (Check all that apply.)

Do not have an online payment solution ..............................................................19

CollectorSolutions ..................................................................................................0

NorthStar ................................................................................................................0

Ocius ......................................................................................................................3

Payment Service Network ......................................................................................3

ProfitStar ................................................................................................................9

PropertyBridge, Inc. (A MoneyGram Company) ..................................................23

RentPayment, Inc. (A Yapstone Company) ..........................................................25

Resident ePay/NWP Services Corp. (processed by CheckFree/Fiserv, Inc.) ........3

ResidentPay/Property Solutions International ....................................................12

Velocity/RealPage, Inc. ..........................................................................................9

Yardi Systems, Inc. ..............................................................................................15

Our bank/financial institution or our current bank’s merchant services ................8

Other ....................................................................................................................11

Question 7: What payment options for RENTAL PAYMENT do you make available to your residents? (Check all that apply.)

Cash ....................................................................................................................11

Personal check (not scanned at office) ................................................................79

Commercial check (not scanned at office) ..........................................................53

Cashier’s check/Money order (not scanned at office) ..........................................81

Check scanning (paper check scanned at property) ............................................58

Credit card............................................................................................................77

EFT (Electronic Funds Transfer - online/direct debit) ..........................................78

Question 8: What penetration rates do you experience for each of the payment options you offer? (Estimated penetration percentage for each payment channel option should be calculated by taking the average number of payments that are received via that channel in one month and dividing it by the total number of payments where the payment channel is available.)

Personal check (not scanned at office) ............................................................41%

Check scanning (paper check scanned at office) ............................................24%

Credit card ........................................................................................................12%

EFT (Electronic Funds Transfer - online/direct debit)........................................10%

Cashier’s check/Money order (not scanned at office) ........................................9%

Cash....................................................................................................................4%

Commercial check (not scanned at office) ........................................................2%

NOTE: The percentages above represent the average penetration rate based on all payment channels.You cannot add these averages among groups (such as check processing) to create combined averages.


Question 9: For which of the following charges do you accept online payments (excluding credit cards)?(Check all that apply.)

Rent (and other charges, except utilities - other charges include ancillaryincome fees such as: cable, parking, garage, storage, etc.) ............................57

Application fees....................................................................................................33

Hold deposits ......................................................................................................48

Security deposits..................................................................................................61

Utilities ..................................................................................................................39

Collections..............................................................................................................0

Question 10: Of your residents using online check payments, what percentage are scheduled as recurring monthly payments for rent? (Please estimate.)

We do not offer an online check payment solution ..............................................28

0% ........................................................................................................................28

1 - 5% ..................................................................................................................15

6 - 10% ..................................................................................................................7

11 - 15% ................................................................................................................5

16 - 20% ................................................................................................................7

21 - 25% ..............................................................................................................20

> 26% ....................................................................................................................0

Question 11: Where do your residents present/send payment checks? (Check all that apply.)

At the property....................................................................................................105

At the corporate/regional office............................................................................12

At a third-party/“lockbox” solution provider ..........................................................8

Question 12: Do you scan checks? (Check all that apply.)

Yes, personal checks............................................................................................59

Yes, business checks/Check21 (money orders, business checks, cashier's checks) ........................................47

No ........................................................................................................................47

Question 13: If you scan checks, where does the actual scanning function occur? (Not receipt of check, but actual check scanning.)

We do not scan checks ........................................................................................47

At the property......................................................................................................56

At the corporate/regional office..............................................................................3

At a third party/“lockbox” solution provider ..........................................................1

At multiple locations; the property, corporate/regional office and/or a third-party/“lockbox” solution provider ..............................................3


Question 14: If you scan checks, which brand of check scanner do you use? (Check all that apply.)


Canon ....................................................................................................................3

Digital Check ..........................................................................................................6

Kodak ....................................................................................................................0

Magtek..................................................................................................................15

Panini....................................................................................................................28

RDM........................................................................................................................6

Other ....................................................................................................................12

Question 15: If you scan checks, do you scan? (Check all that apply.)


Personal checks ..................................................................................................62

Commercial checks (these types of checks are also known as Check21 payments) ........................43

Cashier’s checks/Money orders (these types of checks are also known as Check21 payments) ........................50

Question 16: Do you use payment coupons/invoices when scanning checks?


Yes ..........................................................................................................................4

No ........................................................................................................................61

Question 17: Do you scan personal checks in the same batch as other types of checks? (i.e., Commercial checks, Cashier’s checks and Money orders)

We do not scan personal checks ........................................................................46

We ONLY scan personal checks ..........................................................................12

Yes ........................................................................................................................42

No ........................................................................................................................10

Question 18: What is your biggest concern or issue with scanning checks? (Check all that apply.)


MICR line problems/issues ..................................................................................21

Accounting/reconciliation issues..........................................................................21

Processing time....................................................................................................15

Integration with my property management software ..........................................23

Check amount verification....................................................................................18

Batch submission errors/Internal server errors ....................................................15

Money order, Commercial check, Cashier’s check returns..................................21

Duplicates submitted for non-personal scanned items ........................................6

Other ....................................................................................................................14


Question 19: What card types do you accept? (Check all that apply.)

We do not accept credit cards ............................................................................17

Visa ......................................................................................................................93

MasterCard ..........................................................................................................90

American Express ................................................................................................27

Discover................................................................................................................54

Question 20: For which of the following charges do you accept credit cards? (Check all that apply.)


Rent (and other charges, except utilities. Other charges include ancillary income fees such as: cable, parking, garage, storage, etc.) ..............81

Application fees....................................................................................................61

Hold deposits ......................................................................................................69

Security deposits..................................................................................................58

Utilities ..................................................................................................................57

Collections............................................................................................................22

Question 21: If you accept credit cards for rent, how do you handle the convenience fees?

We do not accept credit cards for rent ................................................................29

Fee not charged to resident ..................................................................................7

Flat fee, charged to resident (same fee charged to all residents at the property and may differ from property to property for some firms) ..................52

Variable fee, charged to resident (a percentage of the transaction amount)..........9

Tiered fee based on rent, charged to resident ......................................................3

NOTE: only 81 firms reported accepting credit cards for rent.

Question 22: Do you accept credit card payments for rent (including utilities and other associated charges) via? (Check all that apply.)


Phone ..................................................................................................................36

Fax..........................................................................................................................9

Online ..................................................................................................................61

Leasing office ......................................................................................................39

Question 23: If you accept credit cards for rent, what FLAT FEE are you charging the resident for convenience fees? (This is the average FLAT FEE charged at all of your properties.)

We are not charging a FLAT FEE ..........................................................................57

< $10.99 ................................................................................................................6

$11.00 - $20.99 ....................................................................................................16

$21.00 - $25.99 ....................................................................................................15

$26.00 - $35.99 ....................................................................................................12

$36.00 - $50.99 ......................................................................................................3

> $51.00 ................................................................................................................1


Question 24: If you accept credit cards for rent, what percentage of the transaction amount are you (the owner/manager) charged? (Please respond for each credit card that you accept.)

We are not charged a variable fee........................................................................51

Question 25: For units with multiple residents do you:

Only accept one payment per unit ......................................................................30

Accept multiple payments per unit ......................................................................80

Question 26: Are residents allowed to pay rent in advance?

Yes, with no restrictions ......................................................................................67

Yes, with restrictions ............................................................................................31

No ........................................................................................................................12

Question 27: What restrictions do you impose on residents regarding payment of rent in advance?(Check all that apply.)

May not pay last/final month’s rent ......................................................................15

May not pay two months in advance ..................................................................24

May not pay three months in advance ................................................................16

Visa

< 1% ..................................................2

1.1 - 1.5% ..........................................6

1.6 - 2.0% ........................................15

2.1 - 2.5% ........................................23

2.6 - 3.0% ........................................10

3.1 - 3.5% ..........................................2

> 3.6% ................................................0

MasterCard

< 1% ..................................................2

1.1 - 1.5% ..........................................7

1.6 - 2.0% ........................................13

2.1 - 2.5% ........................................23

2.6 - 3.0% ........................................10

3.1 - 3.5% ..........................................2

> 3.6% ................................................0

American Express

< 1% ..................................................2

1.1 - 1.5% ..........................................2

1.6 - 2.0% ..........................................5

2.1 - 2.5% ..........................................4

2.6 - 3.0% ..........................................4

3.1 - 3.5% ..........................................3

> 3.6% ................................................0

Discover

< 1% ..................................................2

1.1 - 1.5% ..........................................3

1.6 - 2.0% ..........................................6

2.1 - 2.5% ........................................15

2.6 - 3.0% ..........................................7

3.1 - 3.5% ..........................................2

> 3.6% ................................................0

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automated payments: progress and challenges

Documents

national apartment association

housing policy

industry structure

scope of industry research

apartment market conditions

preeminent source of

check payments

online payments