Ask HN: Why don't we pay our rent online?

https://news.ycombinator.com/item?id=778170

by ramoq • 17 years ago

14 23 17 years ago

news.ycombinator.com

After juggling through serveral statup ideas, one that often made me stop and think was the current state of rental payments(for apartments etc).

There are plenty of companies in this space(facilitating online rental payments), but not a single one of them has made a splash.

I've come across several 'hurdles' when looking at solutions for this. The biggest being high transactions costs on large payments being sent (via paypal or even merchant accounts with banks). When paying 800$ a month there is quite a bit to fork over in trans fees.

any ideas?

cperciva2• 17 years ago

Why don't we pay our rent online?

Probably because the US banking system is about 30 years behind the rest of the world. Outside of the USA, people pay their rent via bank transfer all the time.

ramoq4• 17 years ago

It's absolutely archaic that I have to wait for my landlord and either give him cash/check in hand every month. This needs to be fixed!

Why can't I pay my rent with my credit card?

cperciva2• 17 years ago

Why can't I pay my rent with my credit card?

Because, as you point out, credit cards have large transaction fees. This is an inevitable consequence of it being a "pull" payment mechanism.

If you want to fix the paying-rent problem, you need to convince US banks to provide an efficient "push" mechanism for payments such as exists in the rest of the world -- i.e., a way that you can tell your bank "send $X to account number 12345 at bank number 6789".

daleharvey• 17 years ago

I was slightly confused by the question, Ive been paying rent online for 4/5 years now (UK)

and I honestly thought our banking system was pretty archaic

ramoq4• 17 years ago

Yes it would be prudent to mention this question pertains to us North Americans :)

movix• 17 years ago

Another confused UK resident... are you saying that there's no system in place in the US to automatically do a direct debit when your rent is due?? Surely not, there must be.

noss• 17 years ago

Anyone have an explanation why that is so? I mean it is one thing to blame the banks, but new banks could start with better technology usage. Customers don't want it? Companies billing people don't want it?

It seems like there is some kind of startup idea here. I don't know which. I just know I'd hate to handle cheques as a business owner, or myself mail in cheques using postal services, or stand in line at a bank to pay my bills.

I have a theory that government-owned banks had the "market share" for their system that it was worth it for private companies to implement that system. While in a more privatized bank system it is not worth to implement a system from one bank that only a fraction of your customers have access to.

there• 17 years ago

i still don't understand why bank transfers take as long as they do.

for me to transfer money electronically from one of my checking accounts to the other, it takes maybe 5 days to process and clear. yet if i physically drive to one bank, withdraw the same amount in cash, then drive to the other bank and deposit it, it clears on both sides within a day.

burnout15402• 17 years ago

Check clearing is ridiculous as well. Congress passed the Check 21 bill to make checks clear faster and prevent people from "floating" checks.

Of course, now banks electronically clear the checks very quickly but take another week or so to actually deposit the money into the client's bank account. During this time they make money off of your money without you having any access to it. It's ridiculous.

vikram• 17 years ago

In uk most banks now transfer money within 2 hours.

trin_• 17 years ago

i actually pay all my fees (rent,internet/phone,energy,gas,mobile ...) via automated wiring (in germany you call it "lastschrift"). i can't imagine the hassle of doing this manually each month.

IsaacSchlueter• 17 years ago

I've been thinking about this a lot ever since I moved out of my parent's house as a kid. In fact, it's probably my most promising startup idea at the moment, and I've done a little bit of research into it. (Of course, everything changes once you start in earnest.)

The whole apartment renter experience is abysmal, and the existing solutions on the internet provide little if any help in most metropolitan areas. Of course, the experience for the owners is usually not a cakewalk either; they face a very competitive market, often with thin margins, high risk, and abusive tenants. One reason why they often don't accept CC payments for rent is that they simply can't afford to!

It's a very regional kind of market, involving a lot of hand-holding and shit-shoveling. Perfectly suited to a small rag-tag group of hackers, imo, but definitely not a quick turnaround "next facebook" kind of startup. Google is unlikely to buy you out ever.

A lot of money changes hands between renters and property owners. My gut says you could make a good living if you could figure out how to tackle this problem in a way that makes the experience suck less for everyone involved. At lest, that's one sketch on my whiteboard. I'm looking forward to having some competition. ^_^

In the short term, if you're like me and simply cannot accept the PITA of remembering to walk downstairs with a check every month, you can probably have your bank mail out a certified check every month for a pretty reasonable fee, or perhaps even for free.

pg2• 17 years ago

We've tried three times to fund startups solving this problem. There's one in this cycle that may be the answer.

ramoq4• 17 years ago

Exactly, I think there are over at least 10+ companies in this space. But for some reason they all suck (and their domain names are far worse).

"We've tried three times to fund startups solving this problem" <- They never surfaced? Did they change gears along the way?

p.s. Debit payments online are usually not subject to high trans fees, but that could change soon (I'm from Canada)

pg2• 17 years ago

One fell apart due to founder disputes, and another changed their idea to something else.

yalurker• 17 years ago

I already pay my rent online, as well as have an interface to request maintenance or ask questions to the management company. This is in the US. I can pay by direct bank withdrawal for free, or pay a fee to use a credit card.

My apartment complex uses this system: http://www.propertysolutions.com/ As an end-user of the system, I am completely satisfied.

ramoq4• 17 years ago

There has been some mention of some companies trying to solve problems in this space. But I return to the fact that this problem is still largely unsolved. My evidence is the fact that almost NO ONE I know pays rent online. If a solution exists it's complete lack of adoption hints at the fact that there are serious flaws in it's execution.

Tangurena• 17 years ago

Some apartment companies already do take rent payments online. But those are the more modern companies who tend to cater to younger folks.

In general, folks who run the majority of apartments aren't too interested in fancy new stuff, as much of the fancy new stuff that gets pitched to them are thinly disguised plots to swindle them out of something.

Management companies, depending on the size of the apartment complex already suck between 5-10% of the gross receipts off the top. Adding the transaction costs for online payment (usually close to the costs of a credit card, so they'll be in the 1-3% range), and a marginally profitable apartment complex can quickly go into the red with cash flow problems.

The apartment complex I live in tends to have a bimodal age distribution. We're close to a private university, so there are a bunch of younger folks, but there are also a lot of older tenants. I've been here 5 years (some bad credit stuff rolls off my credit report late this year, so I can start looking for a house about the beginning of 2010), and among the longer term tenants, I'm one of the few who are "into" computers enough that I'd consider EFT.

tempuname• 17 years ago

I am currently one of the people responsible for the finances of a student housing cooperative.

There is precious little property management software and services directed at small to medium sized landlords (most of the market). With a couple hundred members/residents we're a fairly large organization, bigger than almost all of the other landlords in our market, but we're still too small to afford what's out there.1

Address the following problems and you will have a hundred billion dollar market to yourself:

1) Margins are pitiful and you want to take 3%?

2)Retailers have to take credit cards because consumers can just go elsewhere. Tenants don't really choose a place to live based on payment options.

3) Staff is untrained and cheap. Typing checks into Excel or Quickbooks is dead simple. We calculated that for the cost of automating this process with a Tenant Pro2 module and ach, we could hire another full time staff member.

4) We have no IT staff. Existing services all talk about integration with accounting software and marketing web sites. The vast majority of landlords use Quickbooks/Excel and have no web site. Don't integrate, we can import/export monthly.

5) We don't have accountants on staff.3 Even those that can afford Tenant Pro, don't really know how to use it. Less is more. Tenant, apartment number, payments, payments owed. Anything more and you'll just confuse us.

6) Problems 3+4+5: Less than 25 units, the landlord is the accountant, general counsel, marketer, agent, IT, general contractor, and often subcontractor. Going to the bank once a month they can do, but you want them to wrap their head around ach?

-----------------------------------------

1.Take a look at propertysolutions.com. The clients they list have thousands or tens of thousands of units. That, and the fact they don't post prices or fees anywhere tells me there is no way they can help me.

2. Tenant Pro, the dominant property management software, is crap. Please kill it.

3. Actually, we have one, but we're a feel good nonprofit so we pay peanuts and our funky ownership structure makes it a requirement.

sorry this is a mess, been a long week

Aevin1387• 17 years ago

The complex I live in allows payments online both through bank tranfer, and credit card payment, and have done so since I first moved in two years ago. The system they use is through http://realpage.com/onesite/ and until this month, they charged a $10 processing fee for all online payments.

rbarooah• 17 years ago

I've paid my rent online in the US for the past 7 years - with 4 different landlords using PayTrust, which simply prints and mails checks automatically. It also scans paper bills, and gives a lot of control and feedback to stop things going wrong, so it's better than most bank-based bill pay services.

Like most of the other UK people, I was very surprised about the lack of a direct debit equivalent over here. A major issue is that in the UK, consumers using Direct Debit are strongly protected by law which compels merchants to return the money in the event of a dispute. In the US, no such protections exist, so if the merchant (or landlord) overchaged, you'd be at the mercy of their dispute resolution procedures and the courts.

Ask HN: Why don't we pay our rent online?

Related Stories