Digital Payment Request Drives PropTech Upgrade
There’s a reason paper checks have been around so long for multi-family property management companies, and it’s not just because the platforms they use to collect tenant payments have barely been. upgrades in recent decades.
In addition to the familiarity of the payment method, there is a sense of security that can come from tenants physically dating a check to prove that payments arrived on time – and for property managers, this feature can be useful for accounts receivable (AR) and reconciliation workflows in the back office.
But the benefits of controls no longer outweigh their risks and burdens, a fact that became painfully apparent during the pandemic. It was a period of “pessimism,” said Entrata President Chase harrington, but which has shown the power of electronic payments to withstand the disruption.
In a conversation with Karen Webster, Harrington discussed how the forced shift to accepting electronic payments in the multi-family arena has spurred an acceleration in the digitization efforts of property management companies. Meeting these new expectations has become an opportunity for technology providers like Entrata, but supporting the modernization will require more than enabling electronic payments or assembling siled services.
Beyond rent payments
FinTech innovation has given companies in all industries access to tools to automate financial workflows. For the multi-family property management space, these systems have primarily focused on helping businesses accept electronic payments, a change according to Harrington has been significantly accelerated amid the pandemic.
“As the rental offices closed, the paper was no longer working,” he said, adding, “Finally, there was this paradigm shift.”
Industry players have realized that electronic payments work as well as checks and, indeed, can be of much more benefit for accounting and cash management purposes.
But the health crisis has gone even further to change the mentalities of property managers.
“People started to say, ‘Wait, now we can run our business differently because of technology,’ Harrington said.
Businesses today require more than portals to accept payments or respond to maintenance requests. They need solutions that can support financial management and accounting, accounts payable (AP), and even marketing and lead research.
Increasingly, Harrington said, these organizations are looking for value-added solutions that can address other key frictions, like the risk of fraud, which he says is a “massive problem” in the multi-family industry. , and saw a slight increase in the midst of the pandemic.
For Entrata, this means a significant push to add solutions such as identity protection and income verification of housing seekers, identify payment behaviors that might signal tenant fraud, and extend these protections to customer’s own flows. AP work for companies with the ability to generate single-use virtual cards – a feature currently in preparation for Entrata.
Unify the experience
In response to demands from multi-family property management companies for greater functionality, industry technology providers have often turned to mergers and acquisitions (M&A) to recruit ancillary service providers and integrate them under one. Mark. But that can lead to clunky interfaces and make a platform too rigid to continue to adapt to future needs and market changes, Harrington said.
Taking a user-friendly, cloud-native application programming interface (API) approach from the start means that end users and their own customers do not have to switch between systems, while the solution can also further extend its built-in functionality. effectively.
“It delivers so much efficiency, from data integrity to process efficiency,” Harrington said.
This flexibility will be vital for Entrata as it expands across borders and allows property managers to seamlessly enter their own new markets with a platform that can adapt to local languages, currencies. and the unique behaviors of tenants.
This strategy also allows the portal to connect the dots for managers of multi-family properties in a variety of ways.
For example, the ability to loop directly into payroll systems or tenant bank accounts further mitigates the risk of photoshopped pay stubs or errors in income data. Likewise, if a property management company wants to understand how to invest in their marketing efforts, a portal with both marketing and accounting tools can use accounting data to gauge how much a business should spend to get the best return.
Having raised $ 507 million This week from Silver Lake, Qualtrics founder Ryan Smith, Vivint Smart Home founder Todd Pedersen and others, Entrata will continue to prioritize this system flexibility as it not only expands into new geographic markets. , but also in multi-family industrial niches.
Harrington said there was significant activity “across the board,” with retirement and seniors living an active space, while military and affordable housing is also expanding.
For managers of multi-family properties, the ability to enter these new segments, expand their reach into new geographies, and streamline the overall management of the business will require more than back-office digitization. This will require solutions capable of unifying and streamlining workflows from AR to PA, with an interface that facilitates adoption for property managers and tenants.
With its latest funding, Entrata will continue its efforts to fill these gaps for the industry.
“We see the momentum that we have,” noted Harrington. “We don’t want to lose momentum; we want to keep pushing it forward.