10 things rental agents should ask their payment provider

10 things rental agents should ask their payment provider

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10 things rental agents should ask their payment provider

When it comes to handling rental payments, nothing but the best is really good enough. Think about it – when dealing with other people’s money, do you feel comfortable taking a chance on sub-standard compliance and security?

There are many apps claiming to do rental payments, but rental payment processing is not for the unprepared. Payment service providers are governed by strict laws and regulations covering complex issues such as corporate governance, the management of trust accounts and the protection of personal information.

Considering the Property Practitioners Act (22 of 2019) and, more specifically, the draft Property Practitioners Regulations that will soon bring the Act into operation, there are important questions that you as a rental agent should ask your payment provider or prospective provider.

  1. Can their system pay all landlords, suppliers and the agency from reconciled trust accounts within minutes? Or will your clients be kept waiting for their money while you struggle to reconcile large numbers of transactions spread out throughout the month?
  1. Can their system tell you where your clients’ money is at any time? The system should offer an automated and date-stamped audit log that informs you of every transaction on the platform and lets you see who made it – and that record should be saved permanently and automatically in such a way that it cannot be changed or deleted.
  1. How clearly are the payment platform’s trust accounts separated from one another? Some payment service providers cut corners by pushing incoming payments to a single settlement account, but this creates the risk of paying one landlord with another landlord’s money – or even of using tenants’ security deposits to pay for repairs during the lease. Payment providers can prevent this by keeping different clients’ (landlords’ and tenants’) trust funds separate at all times. Ask your provider if they do.
  1. Are your trust accounts reconciled to the cent, daily? Does your service provider have a dedicated team of professionals who ensure that your trust fund environment is 100% accurate at all times? Regular reconciliation of payments ensures that accounts are more accurate, and that landlords and contractors receive their payments sooner.
  1. What measures do they take to keep client data safe? A provider should offer bank-level security, including state-of-the-art encryption, and keep backups in multiple secure locations. Data loss – or worse, data theft – can result in huge losses to clients and destroy an agency’s reputation.
  1. Does their platform make your annual audit easier? Audits can be stressful and time-consuming, and a lengthy audit process can get in the way of a rental agent’s regular tasks. A payment processing system that provides complete and well-organised data makes audits quicker and easier, but not all platforms do. Ask your provider how, specifically, their system helps during audit season, and whether it meets all the requirements of the imminent Property Practitioners Regulations.
  1. What is your provider’s track record in the residential rental payments space? Ask your provider for their credentials – and ask yourself if you can afford to gamble on an untested system.
  1. Who owns your provider’s payment processing system? While some popular platforms are independently owned, others are operated by property managers and estate agents (albeit under a different trade name), or by people with close ties to particular agencies. Ask yourself if you could trust a rival agent to manage your rental payment processing, and just how safe your client data would be.
  1. Is training and technical support readily available, for free, for the lifetime of the contract? Some payment service providers restrict their initial training and technical support to certain basic functions only.
  1. How does the onboarding process work? Will a real person be available to help you while you migrate to the new system, and how long will it take? With a service as vital as payment processing, you should always be able to get timely help from a dedicated expert via telephone or e-mail, regardless of how long you’ve been a client.

Asking the right questions will ensure that agents find the best possible payment processing partner to work with. As with any financial partner, it’s vital to understand all the possible pressure points before signing on the dotted line.

While aggressively-priced payment processing systems may look tempting, particularly in uncertain economic times, they may only be able to reduce their prices by cutting corners – and with so many legal requirements to meet when it comes to payment processing, there are some corners that shouldn’t be cut.

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