In the world of payment facilitators, it’s hard to envision a segment more in need of payments updates than apartment rentals—one of the last nature preserves for the American Check. A deal announced on Tuesday (Dec. 1) between RentMoola and MasterCard is a very optimistic sign.
The deal itself is simple, but the potential implications are anything but. The deal positions MasterCard as RentMoola’s preferred payment brand in the U.S. and Canada, which that tenants and condo owners get an unspecified preferred rate “as well as (again, unspecified) rewards with exclusive offers.” This arrangement will include MasterPass “in early 2016,” which presumably means any time before July.
Replacing checks with payment cards is a step in the right direction, but where rental payments can really shake things up is when the process bypasses the landlord. That is a scenario—along the lines of what RadPad is doing—where tenants sign up and the payments mechanism moves with them, even into a building where the management has never heard of mobile payments. Yapstone and PayLease are also making substantive progress in this area.
“Rent payments are one of the hottest areas in payments acceptance and any way to make it easier, faster and reduce friction for a consumer to pay rent is well overdue,” said Todd Ablowitz, Co-Founder/Publisher of PaymentFacilitator.com. “I love the models where the landlord doesn’t sign up, but where tenants sign up. And they push the payments directly to the landlord. That completely removes the friction from one side of the market. This is a massive breaking down one of the key walls in the 2-sided market.”
The beauty of the mobile system is that it not only makes it much more likely that landlords will get paid (and get paid quickly and efficiently), but that tenants would no longer have to repeatedly go through security procedures with each new apartment. With such payment efficiencies, would security deposits even be needed?
Networks of apartments could make it easier for finding new places to live (“I just got transferred and have one week to report to my new state”) and a centralized means for reporting problems with landlords. This way, the tenant has less fear about a new landlord (“any major troubles would be known by the centralized app”) and the landlord has less fear of payments.
PFs work best when payments efficiencies are being used to solve problems that seemingly have little to do with payments.