Can Accepting Rent On A Credit Card Be An Upside For Property Owners?

When Governor Murphy signed a law on January 4th requiring landlords and property managers to accept credit cards as a form of payment from their tenants, there was collective apprehension from thousands of New Jersey property owners. Until this new legislation, the vast majority of property owners did not accept credit cards, preferring cash, automatic bank account withdrawals and money orders over plastic. Despite the efficiencies of credit cards, the perceived downsides did not outweigh that upside for most.  

Yet, the pandemic has put many residential and commercial renters in difficult financial circumstances. It has also given property owners their own set of challenges. Their tenants are suddenly struggling to pay rent – income needed to earn a living, pay vendors and maintain and upkeep buildings. Property owners who have historically pushed back on accepting credit cards as a form of payment, point to three primary reasons. Let’s look at how today’s credit card processing solutions are overcoming their concerns.  

Concern 1: Transaction Fees are Too High – Select merchant processors, like OTM Payments, offer a new program that allows property owners to accept credit card transactions and pass the transaction fees over to the tenant. This is called a surcharge program and it is fully compliant with state regulations and card brand sanctioned. Using a ‘smart’ terminal or web-based processing portal, our technology automatically applies the transaction fee to every credit card payment. Property managers keep 100% of the rent payment.

 Concern 2: It Takes Too Long to Receive My Money – When batched out and settled at the correct time (typically 7:00pm or 8:00pm), the previously mentioned surcharge platform offers next day funding on credit card transactions. In most instances, this is speedier than the 1-2 days it may take a personal check to clear and the same turnaround time as money orders and cashier’s checks.

 Concern 3: Tenants Will Push Back on Absorbing the Fees – Today, cardholders have every incentive to make purchases using a credit card, earning everything from cash back to rewards to points and miles that can be used for vacation. There are a lot of advantages for renters to put this monthly nut on the card and quite often, those benefits outweigh absorbing the fee. Additionally, many renters, especially in New Jersey, continue to face challenges in paying rent due to the pandemic, whether from a decrease in income or revenue. Offering an alternative option for payment is welcome for those who may be cash-strapped for a period of time.

OTM Payments’ industry experts manage the registration with the card brand, which is essential for total compliance, and the application process is simple and quick. There are no long-term contracts and no cancellation fees. Since the program is available for processing on a terminal, virtual terminal and web-based platforms, property owners have flexibility. To learn more or to get started, reach out to family-owned and operated OTM Payments at 732.230.7700 or sales@onthemarkpayments.com.

 

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