As rental markets become more competitive, “resident experience” is the name of the game, and digital interactions with residents are now a key part of creating that desirable resident experience. Renters expect the digital, automated service they get as customers in other industries. This includes transactions, such as rent and fee payments. Managers can up their digital game on the payables side as well, streamlining purchasing and regaining precious time for their teams.
JPM talked to Yardi Property Management Software about this ongoing trend toward digital payments and the benefits of utilizing the technology.
JPM: First, can you talk about the shift in resident expectations in general, and how new norms around using technology to perform our jobs have spurred rapid innovation in real estate?
Yardi: Residents now expect seamless interactions for not just basic questions and information, but also their more advanced inquiries. Our data suggests that residents are very comfortable engaging with chatbots for a much broader set of intents than initially thought. The preferred channels are through a property website or app, by text, and via email. And the good news is that most of these patterns are now documented and available in chatbot technology.
In terms of the leasing lifecycle, we have seen chatbots become very effective in getting new prospects to schedule a tour at a property. Interestingly, while prospects are very comfortable scheduling a tour with a bot, they still want that human interaction once they get to the property. As a result, the vast majority of the time, prospects will choose a guided tour with a leasing professional onsite.
Once moved in, residents require user-friendly property apps to keep abreast of things happening in the community, pay rent, and submit maintenance requests. At specific properties, we’re seeing more interest in connected units where tenants can manage door locks and thermostats from the same app.
Ultimately, it comes down to prospects and residents becoming more comfortable in, and even expecting, a broadly touchless world. However, when it comes to deciding on where to live, they still want to have a human connection before making a final decision.
JPM: How can new tech solutions streamline vendor and owner payments?
Yardi: Vendors are moving in the same direction as the rest of the industry—they want to minimize paper and create as close to a touchless payment environment as possible. There are numerous vendor-focused platforms, but the ones that will work most effectively are those systems that connect the vendor directly to the underlying accounting system used by their clients. As a result, vendors are generally tolerant of needing to log in to several vendor-oriented platforms.
Though vendors may adapt to logging in to multiple platforms, what will separate one platform from another will be its ability to submit invoices simply, view invoice status, and receive touchless payments. We are seeing a shift in vendors becoming more comfortable with receiving virtual card payments. At the outset of the pandemic, virtual card payments were still somewhat misunderstood. But as the pandemic progressed, vendors saw the value in touchless payments, which reduces both their time to money and their manual effort.
Vendors generally fall into one of three buckets: they will accept card payments through their payment platforms but won’t join a closed-loop payment system; they’ll onboard to a closed-loop system as a way to accept credit card payments; or they are unwilling to accept credit card payments of any kind. We’re seeing fewer and fewer vendors falling into the third category. As a result, vendor platforms need to be flexible enough to support virtual card payments that can be transacted through the vendors’ payment systems or through a closed-loop system. Those are the platforms that the vendors will tend to gravitate toward.
JPM: What are the main considerations in implementing a digital payment solution?
Yardi: The first consideration, and one of the biggest implicit positives of a digital payment solution, is security. Digital payments are far more secure than physical check-based payments. They can be tracked automatically, and fraud from payment to payment is exceedingly low.
A firm’s ideal digital payment solution will be tightly integrated with its underlying accounting system. This allows for real-time—or close to it—reconciliation of rents coming in and payments going out. Another consideration is flexibility—“digital payments” can mean many things to many people, and a solution that can meet flexibility demands is important. For resident payments, accepting ACH, credit card, debit card, and mobile check deposit provides more options for your residents to pay electronically. On the vendor side, the goal is to provide touchless payments wherever possible. This is achieved in two ways: either through a closed-loop system or by paying directly on the vendor’s payment portal. Payment platforms that can provide this flexibility will see more vendors opting to receive digital payments.
JPM: Digital payment solutions are paperless, giving companies the additional environmental benefit of reducing waste. How have Yardi digital payment solutions contributed to your clients’ sustainability objectives?
Yardi: While the primary reasons for pushing the shift to digital payments are convenience and reduced friction in the flow of money, there is no question that there are ancillary environmental benefits. The reduction of paper consumption is low-hanging fruit for the real estate industry in terms of both direct and indirect sustainability measures. While the decrease in paper usage is an obvious plus, there are also transportation costs for each physical check sent, whether from a resident or to a vendor. Yardi’s goal is to provide flexible and frictionless payment processing for both rent and payables to ensure the seamless flow of funds with as few external impacts as possible.