Increasing Resident Use of Electronic Payments

Michael RadiceNWP Services Corporation

April 24th, 2008

What are we talking about really?

It is about what you can do to ensure your electronic payment program gets USED by residents!

To truly drive successful adoption of an electronic payments platform smart multifamily companies…

Know why it is important to your organization

– Doesn’t it have everything to do with your organization’s financial success?

– What can you expect from the right service, one that is widely accepted?

• “Good” funds faster

• Accelerate cash flow

• Create efficiencies allowing your staff to focus on leasing activities

• Reduce the cost of processing payments

• Increased resident satisfaction

Understand why some fail to gain adoption

– “You can lead a horse to water…”

• Poor planning, execution and follow thru, from top-down

• Mis-matched needs

• Frontline execution – staff doesn’t see value and won’t promote

• Transaction fees to resident stifle program

Consider consumer trends

– Knowing consumer trends will help you serve your market

• Residents search, find, compare, communicate, and reserve all online

• The ability to pay online is expected

– 78% percent of renters have a computer in their apartment, and 85 percent of those have Internet service1

– Renters use the Internet seven days a week at home & high-speed service is a deciding factor in selecting an apartment home1

– 63 million online households pay at least one bill online and over 75% (or 47.9M) of those pay directly at a billers website2

1 Source: NMHC Apartment Renter Technology Study – Feb 20072 Source: Harris Interactive/Marketing Workshop national online consumer survey sponsored by CheckFree - Feb 2008

Consider consumer trends, con’t.

– Statistics support the behavior (payments thru the ACH Network)

• 13.9 billion transactions worth more than $28.8 TRILLION were sent via the ACH network in 2007 (13% increase over 2006) 3

• 24% were ARC transactions and 27.18% were WEB-based ACH transactions 3

• By 2010 it is estimated that ACH transaction volume will reach 25 billion with worth over $50 TRILLION 3

3 Source: NACHA – 2008

Recognize key fundamentals play a large role in driving consumer

adoption– Offer residents the following and adoption & recurring use will follow:

• Access and convenience to pay where and when they want

• Choice and flexibility in how they want to pay

• Control over amount, and scheduling same-day and future payments

• Cost; none, just ask any top bank

• Ease of use for staff and residents alike

• Security and reliability

Best Practices for ensuring adoption

– Embrace change management

– Assign a clear, internal leader and “champion”

– Know your resident

– Formulate the right strategy for your business

– Deploy a flexible service that offers choice, convenience, reliability and security

– Set realistic goals and TEST; pilot programs are key

Best Practices for ensuring adoption, con’t.

– Make it easy and reliable (for residents and staff)

– Educate and train your organization completely (objectives, goals and desired outcomes)

– Promote, Promote, Promote

– Communicate consistently and frequently

– Create value for the resident and your on-site staff

– Listen and have a feedback mechanism

The Future of electronic payments

– EBPP: Combination of electronic bill presentment and payment• Options: Push or Pull – sending a bill to customers via email or direct to

website• “When users can easily view & pay a bill electronically, it usually speeds

up the payment of the bill. Research indicates that nearly 20 % of customers receiving eBills in an easy manner pay the bill on the day they receive it”*

– Pay by text message– Pay by cell phone– SpeedPass technology– Full service kiosks in leasing office– A word of caution – keep in mind your needs!

* Source: Billing and Payment Profiles and Best Practices Study: The Ascent Group Inc. May 07

Questions to consider

Question: How important is it that payment tools are integrated into some other aspects of their workflow (i.e. PMS or in initial leasing transaction)?

Question: Is there ever going to be a role for property owners to collect payments for other billers through onsite kiosks?

Question: What can/should be done to make the payment process transparent to renters, and to provide them with historical access to their data?

Question: Can you make the case about rental payments by looking at how firms use electronic payments in a b-to-b context?

In summary

– The best ways to drive adoption of your e-payment program…

• Know why it is important to your organization

• Understand why some fail to gain adoption

• Consider consumer trends

• Resident preference cannot be overlooked

• Turn to best practices from those who have gone through it

• The future is now

Case Study #1

• Mid-size owner/manager• Implemented all communities• Single PMS system• Payments Mix

– Online ACH property website– On-site check scanners– Credit Card

• Points to note:• 30-days after deploying online;

655% increase• Consistent promo drove online use • Began check scanning in month 5;

637% increase within 30-days• Processing 100% of payments

electronically (10,000+/month)

Case Study #2

• Large owner/manager• Implemented portion of properties• Multiple PMS systems• Payments Mix

– Online ACH property website– On-site check scanners

• Points to note:• 30-days after deploying online;

577% increase• Champion changed mid-rollout

creating delay• Scaled 8 month deployment of

scanners until Month 11