Save money on payment processing: how to make rent collection easier and cheaper with Concurrent

Along with securing tenants, rent collection is one of the most important responsibilities a property manager has. The shift to online rent collection over the last eight years has helped to speed up the process and provide more flexibility for tenants. However, this means that you will incur payment processing fees on every deposit or rent payment collected. 

Payment processing fees can be a major pain point for property managers, owners, and investors alike, particularly if you have a high volume of beds in your portfolio. To help you, we're breaking down everything you need to know about payment processing fees, why they incur, and how you can minimise them to boost the profitability of your portfolio.

What is online rent collection?

Online rent collection tools allow property managers to collect rent and deposit payments online. This makes the payment process more efficient as tenants can make payments at their own convenience. 

What are the benefits of online rent collection?

There are lots of benefits to collecting rent payments online. You can set up automated notifications which remind tenants when to make payments. You can also access real-time payment statuses, so you can keep track of whether tenants have paid or not. This will minimise the amount of time and administrative effort you have to spend chasing late payments. 

As payments are made via an integrated online system which has 24/7 availability, tenants also have more flexibility regarding when and where they can pay from. 

What are payment processing fees?

When any business or merchant, including a property manager, collects payments via direct debit, SEPA, alternative payments (like WeChat pay) or card payments, they will be charged per transaction by the third-party payment provider they are using. This charge for collecting a payment is known as a payment processing fee. 

Why does online rent collection incur payment processing fees?

When you collect a deposit or rent from tenants via an online payment platform, the payment still has to be processed via a third-party payment provider. This means that you will be charged a payment processing fee for each of these transactions. 

If you have a property portfolio with a high volume of beds, the cost of payment processing fees can quickly become very expensive. 

How can tenants pay through Concurrent?

With Concurrent, tenants can pay via direct debit or through Open Banking. International tenants, often students, can also use the above methods if they have a bank account that allows them to do so, or they can use Transfermate or debit cards to make international payments. 

What sets Concurrent apart?

Integrated payments for efficient rent reconciliation

Concurrent has an integrated online payment system, which allows you to power your tenants' deposit and rent collections. When a tenant pays via direct debit, SEPA, debit card or Open Banking, you can benefit from efficient rent reconciliation and lower payment processing fees. 

There is a common misconception in the property market that direct debit payments are hard to administer. This is because they require manual handling to set up and bank reconciliation to track customer payments. This can be considered time-consuming and onerous. By contrast, many property managers and owners consider cards to be both convenient for tenants and easier to administer. This is because the payment status can be updated immediately in the property management software. 

Concurrent changes things. 

Concurrent tightly integrates payments, making direct debits simple for tenants to set up. The platform also automates the collection, status update, and reconciliation steps which had previously required manual effort. This almost entirely eliminates the downsides associated with direct debit payments. Direct debit payments automatically pull the funds from a tenant's account, meaning that they do not have to manually engage. This drives efficiency and performance. 

Concurrent also supports Open Banking payments, which allow tenants to make instant payments through their online banking apps. This offers the convenience of card payments but with accelerated settlement, clearer payment tracking, and enhanced security. 

As payments are embedded in our property management software, clients don't need to worry about signing up for a third-party provider to collect payments. Furthermore, as we have our own contract signing system, the payment due dates are already in the platform. This makes reconciliation far easier as everything is automated. 

How to save money on payment processing fees: Concurrent vs the market 

As most other providers don't have an embedded online payment solution, their clients will be charged a fee ranging from 0.75%-3% for every transaction which will have a direct impact on rent yield. 

By contrast, when you use Concurrent, you will only be charged a payment processing fee of 0.15% + 35p per transaction if you're on a Concurrent Business or Enterprise package and 0.30% + 35p per transaction if you're on our Concurrent Pro package. 

In theory, if you were taking £1 million in rent, the cost of your payment processing fee could be upwards of £30,000 with another provider. However, if you collected rent through Concurrent, this could be reduced to as little as £1,500 (+35p per transaction). 

If you have a lot of beds within your property portfolio, and therefore need to process and collect a high volume of transactions, then the saving could be transformative for your business. 

Benefits of Concurrent's low payment processing fees 

Cost savings 

You can save money on payment processing fees when you use Concurrent, which is undeniably a major benefit in the market. No other provider can currently offer the same rate we do, which gives you a competitive edge.

Increase property value 

Property managers include the cost of payment processing fees in their OpEx (operating expenses), which are the costs associated with the daily running of a business. When you can save money on payment processing fees, your OpEx is slimmer, and your margins are higher. Lower payment processing fees boost the net operating income (NOI) of the asset, and higher NOIs translate to higher asset valuations.

Save money on payment processing fees today with Concurrent 

If you need a streamlined, fully integrated digital contract signing solution and payment collection platform, Concurrent is the ideal solution for you. Speed up your operations, take payments securely, and save money on every transaction. What could be better?

See how much you could save with Concurrent. Book a demo today.